Discuss this statement with reference to the main types of mutual funds and their functions?
Can anyone help with what im meant to do? like how i go about it and structure it?
Thank you to everyone who responds
2007-03-04 23:25:58 · 6 answers · asked by ineedhelp!!! 1 in Business & Finance ➔ Investing
Sounds like a 3 or 4 page homework essay question. but briefly:
General statement: MFs allows the investor to diversify from a fund managers best 20 growth stocks (Janus 20 Fund) to the entire world of finance (total market index funds) one easy investment. Risk is spread among different market sectors, different sized companies, stock of companies, bonds of companies,
Types of MFs - for a well diversified "core" starter, a total stock makret mutual fund should provide the beginner with a well diversified portfolio. Example: VTSMX Vanguard Total Stock Market Index fund has 3,746 US holdings from the biggest (ExxonMobil) to one of the smallest. There are also Total International funds and total bond market funds. So 3 mutual funds allows worldwide diversification.
Other MS (for you to go into detail on) Large Cap, Mid Cap, Small Cap , growth, value, Long term bond, intermediate term bond, short term bond, blend, sector specific funds.
2007-03-05 01:09:22 · answer #1 · answered by gosh137 6 · 0⤊ 0⤋
It depends on what the mutual funds invest in, but generally it would not diversify your portfolio - you would still just own shares.
Diversification is if you spread your investment across shares, property, cash and whatever other investments you can get into. Just spreading your shares around, is not diversification, even though it is probably the answer your teacher is looking for. Which is why he is a teacher, and not a person having an investment cashflow exceeding his monthly expenses.
2007-03-05 03:51:38 · answer #2 · answered by Piet Strydom 3 · 0⤊ 0⤋
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2014-09-25 15:55:42 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Need the advice of a Financial Advisor
2007-03-04 23:28:51 · answer #4 · answered by Anonymous · 0⤊ 0⤋