What to Know About Mutual Funds

Morningstar fund

Investing your money can be a smart way to build your personal wealth. Traditionally, mutual funds investment is a popular choice among those looking to grow their money. Working with an investment research firm can help clients understand best practices of investing in mutual funds as well as fund performance comparison. Here are somethings to understand before investing in mutual funds.

Mutual funds NAV, or net asset value, is the price per share of the specific mutual fund. Mutual funds NAV is calculated by dividing the total value of a mutual fund, minus any liabilities, by the number of outstanding shares. For instance, if a fund has assets totaling $80 million and liabilities of $20 million, mutual funds NAV would be $60 million. If there are 3 million shares outstanding, we divide the $60 million by 3 million and come to $20 per share. Mutual funds NAV is important for investors to know before they make the decision to purchase.

Many people are choosing to invest in mutual funds
as they are more profitable than ever. In the third quarter of 2013, global mutual fund assets reached an all-time high of $28.87 trillion. These investments are beneficial in that they create an automatic diversification of funds in an individual’s portfolio. Having a diverse portfolio is ideal because it provides a certain amount of agility that can protect an individuals wealth from natural market fluctuation.

More information about mutual funds and investment research firms can be found online.