Author: SEC

A “national securities exchange” is a securities exchange that has registered with the SEC under Section 6 of the Securities Exchange Act of 1934.  For a complete list of national securities exchanges and recently approved exchange applications please check here.

This year’s top-performing mutual funds aren’t necessarily going to be next year’s best performers. It’s not uncommon for a fund to have better-than-average performance one year and mediocre or below-average performance the following year. That’s why the SEC requires funds to tell investors that a fund’s past performance does not necessarily predict future results. You… Continue reading MUTUAL FUNDS, PAST PERFORMANCE

A mutual fund is an open-end investment company or fund.  An open-end fund is one of three basic types of investment companies. The other two types of investment companies are closed-end funds and unit investment trusts (UITs). Exchange-traded funds (ETFs) are generally also structured as open-end funds, but can be structured as UITs as well. A mutual fund continuously pools money from many… Continue reading MUTUAL FUNDS

A mutual fund company generally must pay redemption proceeds to a shareholder within seven days of receiving a redemption request from the shareholder. Exceptions apply on days when the New York Stock Exchange is closed, during certain emergencies, or when the SEC issues an order delaying redemptions to protect shareholders in the fund.

Mutual funds must provide a copy of the fund’s prospectus to shareholders after they purchase shares, but investors can – and should – request and read the fund’s prospectus before making an investment decision. There are two kinds of prospectuses: (1) the statutory prospectus; and (2) the summary prospectus. The statutory prospectus is the traditional,… Continue reading MUTUAL FUND PROSPECTUS

As with any business, running a mutual fund involves costs. For example, there are costs incurred in connection with particular investor transactions, such as investor purchases, exchanges, and redemptions. There are also regular fund operating costs that are not necessarily associated with any particular investor transaction, such as investment advisory fees, marketing and distribution expenses, brokerage fees,… Continue reading MUTUAL FUND FEES AND EXPENSES

Some mutual funds offer investors different types of shares, known as “classes.”  Each class invests in the same portfolio of securities and has the same investment objectives and policies.  But each class has different shareholder services and/or distribution arrangements with different fees and expenses.  Because of the different fees and expenses, each class will likely have… Continue reading MUTUAL FUND CLASSES

Mortgage-backed securities (MBS) are debt obligations that represent claims to the cash flows from pools of mortgage loans, most commonly on residential property. Mortgage loans are purchased from banks, mortgage companies, and other originators and then assembled into pools by a governmental, quasi-governmental, or private entity. The entity then issues securities that represent claims on… Continue reading MORTGAGE-BACKED SECURITIES AND COLLATERALIZED MORTGAGE OBLIGATIONS

A market that provides trading in short-term debt.

A money market fund is a type of mutual fund that has relatively low risks compared to other mutual funds and most other investments and historically has had lower returns. Money market funds invest in high quality, short-term debt securities and pay dividends that generally reflect short-term interest rates. Many investors use money market funds to store… Continue reading MONEY MARKET FUND