A mutual fund is an investment vehicle that allows you to pool your investment dollars with other investors. As a group, you get advantages and cost savings that might not be available to you as an individual investor.
Benefits of mutual funds
Investment expertise
The pool of money will be run by one or more professional portfolio managers. Typically they have advanced credentials, years of experience in different types of markets, a wide range of research and analytical tools, and a specialized support staff.
Sophisticated investments
Generally, individual investors are limited in the types of investments they can buy. But with large pools of money behind them, the portfolio managers you invest with can buy specialized investments when appropriate and pursue complex strategies.
Flexibility
You can invest small amounts and also take money out on short notice, within certain limits.
Diversification and choice
Instead of putting a large amount of money into a single investment, you are putting your eggs into many baskets. Each mutual fund unit you buy represents many different investments, chosen by the portfolio manager with the goal of increasing your chances of making a profit while also aiming to reduce your risk. In addition, different mutual funds have been developed to help address a wide range of investor needs, from places to park money temporarily, to tax strategies, to protecting personal wealth for business owners.
Reasonable costs
Mutual funds can give you access to a wide range of investments at moderate expense.
While the concept of mutual funds is very straightforward, the range of choice can seem overwhelming. A financial advisor can help you identify the strategies that best suit your needs and risk tolerance.
For definitions of technical terms in this piece, please visit iaclarington.com/glossary and speak with your investment advisor.
The information provided should not be acted upon without obtaining legal, tax, and investment advice from a licensed professional. Commissions, trailing commissions, management fees, brokerage fees and expenses all may be associated with mutual fund investments, including investments in exchange-traded series of mutual funds. The information presented herein may not encompass all risks associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated.
The iA Clarington Funds are managed by IA Clarington Investments Inc. iA Clarington and the iA Clarington logo, iA Wealth and the iA Wealth logo, and iA Global Asset Management and the iA Global Asset Management logo are trademarks of Industrial Alliance Insurance and Financial Services Inc. and are used under license.