What you get from Mutual Funds

Investment companies perform several important functions for their investors:

• Lower transaction costs. Because they trade large block of securities, investment companies can achieve substantial savings on brokerage fees and commissions.

• Professional management. Many, but not all, investment companies have full-time staff as security analysts and portfolio managers who attempt to achieve superior investment results for their investors.

• Diversification and divisibility. By pooling their money investment companies enable individual shareholders to hold fractional shares of many different securities. They can act as large investors even if individual investors cannot.

• Record keeping and administration. Investment companies issue periodic status reports keeping track of capital gains distribution, dividends, investments and redemptions and they may reinvest dividend and interest income for shareholders.

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