Intro to Mutual Fund Investing
Low interest rates and the growing concerns about retirement planning are just two of the reasons why mutual funds have become a popular investment option for many Canadians. However, with over 2,000 funds available, selecting the right mutual fund(s) can be somewhat daunting.
CIBC Wood Gundy Investment Advisors have the experience and superior resources to recommend specific mutual funds, monitor your progress and discuss your changing needs in the years ahead.
When you invest in a mutual fund, you purchase units which represent your individual share of the underlying mutual fund portfolio. Your savings are combined with those of other unitholders and invested by a professional investment manager (or team of managers) according to the mutual fund's investment objectives and the investment manager's investment style.
Mutual funds provide opportunities to meet a variety of investment goals, because each fund has specific investment objectives. For instance, a fund may focus on investing for growth, for income or a combination of both.
There are many benefits to mutual funds. They offer diversification, allowing you to invest in a variety of securities you may not be able to afford if you bought them individually. As well, they provide professional money management, liquidity, convenience, choice and the potential for strong returns.
The majority of mutual funds are open-ended funds, which issue and redeem shares/units at the mutual fund's net asset value per share (NAVPS) on an ongoing basis. The NAVPS or NAV of a mutual fund is based on the underlying value of the investments in the mutual fund, minus the fund's expenses. While there are closed-end mutual funds, which have a fixed number of shares and are bought and sold on the various stock exchanges, this mutual fund section focuses primarily on open-end mutual funds.
When you purchase a mutual fund, you should understand that all funds charge a management fee to cover the basic management and operating costs of the fund. In addition, investors generally have four sales charge options, depending on the type of mutual fund they purchase:
To determine if mutual funds are an appropriate investment for you speak with a CIBC Wood Gundy Investment Advisor. Remember that it is important to also read the mutual fund's prospectus before you invest.
Use our Find An AdvisorOpens a new window in your browser. tool to locate a CIBC Wood Gundy Investment Advisor near you and take the first step to achieving the financial future you want.