Questions tagged [mutual-funds]

To be used for any questions on mutual funds. For index based funds question the Index-fund tag should be used.

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33
votes
2answers
2k views

What are the important differences between mutual funds and Exchange Traded Funds (ETFs)?

I've been considering, but haven't committed myself yet to investing in Exchange Traded Funds (ETFs), but have to admit that I don't yet fully understand the use-case for them. What factors are ...
20
votes
3answers
2k views

If low-cost index funds are considered the best investment, why are there so many high-cost, managed funds?

The general consensus is that the single best indicator of a fund's future performance is the its expense ratio (source). If you look for more than 5 minutes online you discover the Bogleheads ...
31
votes
8answers
6k views

Paying Off Principal of Home vs. Investing In Mutual Fund

I close on my first home October 21. I've locked in a 4.330% APR on a 30-year fixed conventional mortgage and my payment will be ~$800/month. I've put the required 20% down to avoid paying PMI. ...
2
votes
1answer
2k views

How does end-of-year interact with mutual fund prices (if it does)?

Should I expect prices of mutual fund shares to go up in anticipation of dividends, down after dividends have paid out ... or just trust that the market has already reacted to that and the price is ...
21
votes
2answers
3k views

Mutual fund value went down, shares went up, no action taken by me

I have no prior experience with stocks so please forgive me if this is a dumb question but I don't even know what to try googling. Two days ago I signed up with scottrade. I put $1000 into ICENX ...
13
votes
2answers
4k views

Does the expense ratio of a fund-of-funds include the expense ratios of its holdings?

Suppose a mutual fund invests only in other mutual funds, instead of investing in stocks or bonds directly. Does the reported expense ratio of that fund include the expense ratios of the funds it ...
6
votes
1answer
618 views

Wash sale rule + Mutual Funds/ETFs?

According to IRS rules, you can't sell a security, take a capital loss on your taxes, and then buy back the same or a "substantially identical" security within 30 days. However, "substantially ...
7
votes
2answers
1k views

How to automatically reinvest in non-dividend paying funds

I've read Einsteins quote stating "The most powerful force in the universe is compound interest." However, everywhere I read this is basically only possible with dividend paying stocks and then ...
4
votes
2answers
406 views

What is a mutual fund?

From Investopedia I understand that a mutual fund is a pool of funds used to invest in various assets. I am struggling to understand what it is. I wouldn't be able to spot a mutual fund based on this ...
24
votes
4answers
7k views

Why would a long-term investor ever chose a Mutual Fund over an ETF?

(I read this previous question but would like to differentiate my question by having it focus exclusively on long term, buy and hold investing). From my understanding, it is conventional wisdom that ...
17
votes
3answers
2k views

Regular contribution threshold for ETF vs Index Mutual Fund?

I've seen enough info out there comparing lump-sum investments into ETFs vs mutual funds with respect to broker commissions in the case of ETFs, and the discrepancy between MERs between the two. In ...
34
votes
4answers
2k views

Why do a lot of people recommend Vanguard so often?

What is it with Vanguard? I've heard the name come up a bunch, but I don't know why this particular company is getting all the good free press...
3
votes
2answers
670 views

How to chose index funds, mutual funds from a plethora of options (TD Ameritrade)

I recently rolled over an IRA had to select how to divvy up my portfolio and choose securities. I largely stuck with index funds but I have to be honest I wasn't exactly sure what I was doing/choosing....
5
votes
2answers
279 views

What expenses do 401k funds charge?

What expenses do 401k funds charge? For example, do they charge front-end or back-end loads (commission when buying or selling funds)? Also how do I find out if the 401k administrator charges a fee?
2
votes
2answers
2k views

Net loss not distributed by mutual funds to their shareholders?

From Wikipedia Mutual funds pass taxable income on to their investors annually. The type of income they earn is unchanged as it passes through to the shareholders. For example, mutual fund ...
25
votes
3answers
89k views

What Mutual Funds does Dave Ramsey Invest in?

Heard Dave Ramsey speaking the other night on his growth mutual fund strategy and he mentioned reading one of his fund's prospectus and said this fund had a 78 year history and 11.94% average return ...
9
votes
2answers
1k views

Assessing the value of an ETF

I recently read through Graham's The Intelligent Investor and am looking at what index ETFs or Index Mutual Funds it makes sense for me to invest in. As I was considering this I realized that, at ...
19
votes
6answers
34k views

Is losing money in my 401K normal?

I had about $10.5K in my Fidelity 401K account invested in their target fund. I started it a year ago. This is my first time with investing in the stock market. For the past 2-3 months, it keeps ...
8
votes
1answer
525 views

Can an ETF perform differently than its holdings?

A mutual fund is just a portfolio of stocks (or other assets) and hence the fund performs as well as its holdings [minus various fees]. However, an exchange traded fund (ETF) performs, like a stock, ...
12
votes
3answers
913 views

ETF vs Mutual Fund: How to decide which to use for investing in a popular index?

How do you decide between investing in an ETF, vs. in a mutual fund, for the popular stock indexes? Trading costs, tax efficiency, capital gains?
9
votes
2answers
2k views

Shifting money between mutual funds

In the last 5-7 years, I've gradually invested money in several mutual funds via my bank (USAA). These funds now make up about a third of my portfolio. Initially I had invested in these funds ...
5
votes
1answer
2k views

Why do mutual funds and ETFs in the U.S. not capitalize dividends?

I am from Europe/Belgium and in Europe it is common to have funds and ETFs which capitalize/re-invest instead of distribute the dividends. I have been looking to the Vanguard ETFs and funds lately, ...
3
votes
2answers
155 views

Trying to understand what happens with a brokerage firm's customers when it goes bankrupt (case of study: Lehman Brothers)

I'm trying to understand how secure it is to own mutual funds/ETFs, not in terms of market volatility etc., but in terms of judicial security (i.e. what happens to your holdings if the firm goes ...
3
votes
4answers
483 views

What to move investments to before a crash?

Assume that I'm being very pessimistic and that I'm assuming that the stock market rush leading up to the 1928 crash is a predictor of a similar major "correction" coming for the current 2018 market. ...
3
votes
1answer
258 views

What's the benefit of paying more fees on wealthfront?

I recently become interested in wealthfront, and plan to make the first real investment in my life. However, as I read more about mutual funds and ETFs, I realize that wealthfront is actually built ...
2
votes
2answers
197 views

How can I determine my basis for a gift of mutual funds?

My parents, saving for college many (20+?) years ago, purchased some Evergreen mutual funds for each of their children. I believe the accounts were established in the children's names. Thanks to some ...
2
votes
1answer
565 views

How is a mutual fund and ETF priced?

Is a mutual fund and ETF priced the same way? regardsless of what it contains and if it pays didivends? Is it basically the price of all the assets? or is the demand in the market(as with a stock) ...
1
vote
5answers
264 views

How do I choose one fund over another if "past performance does not indicate future performance"?

I want to grow my capital by investing in funds (e.g. exchange-traded funds, mutual funds). However, I always see this disclaimer: "past performance does not indicate future performance" (or ...
7
votes
4answers
14k views

How can I get intraday prices for mutual funds?

How can I get intraday prices of a mutual fund? (Mine are Oppenheimer funds.)
4
votes
4answers
477 views

How Do Fund Fees Turn Up Exactly?

Regarding the overhead or expense fees associated with holding shares in a mutual fund, how do the fees affect what I'm holding? Is it taken out of the share price? Is it taken out of the (fractional)...
2
votes
2answers
289 views

Sell your home and invest in growth stock mutual fund

I purchased a home and I made an agreement with a guy who is living in that home and paying me monthly rent. Since I live with my brother I don't have to live in my purchased home. The rent I'm ...
2
votes
2answers
99 views

What is the ROI effect of switching mutual funds in a taxable account?

Assuming I'm paying long term capital gains tax, what is the break even point where it is more worthwhile to switch from one fund to another? For (a hypothetical) example, if I have a fund with an ...
27
votes
7answers
3k views

Why is the dominant investing advice for individuals to use mutual funds, exchanged traded funds (ETFs), etc

The dominant advice on this site (including that which I give to novices) regarding investing is to only invest in fund vehicles (mutual funds, ETFs, etc), rather than in individual stocks. Why is ...
11
votes
3answers
2k views

Should I care about expense ratios?

I've never been an investor before, but I recently came into some money. In my understanding, expense ratios for mutual funds and ETFs are typically incorporated into the yield or ticker price. If ...
40
votes
7answers
6k views

Why don’t index-tracking mutual funds corner themselves?

I don't really want to think too much about investments -- just park my surplus money somewhere and be able to come back several years later and see that it has grown. (As this question shows, I'm ...
5
votes
1answer
658 views

Why should I avoid mutual funds as an investment?

I've heard in passing when discussing investments, "oh, you're crazy to invest in mutual funds". I didn't want to seem like I didn't understand at the time. What are the downsides of investing in ...
23
votes
7answers
6k views

Does dollar-cost averaging just means taking risk later?

I am investing in mutual funds and hence reading and trying to learn about it. I was reading this answer which says lump sum investment is far more efficient than DCA. Well, that does not surprise me....
14
votes
3answers
17k views

Should I open a Roth IRA or invest in the S&P 500?

I am a 24 year old high school teacher. Currently, I don't have that much capital to open two accounts. I would rather focus on one at a time until I gain more capital. Should I start with a Roth IRA ...
13
votes
1answer
14k views

What are Vanguard's Admiral Shares?

What are Vanguard's Admiral Shares? I recently heard about them, and I'm not sure how they differ from the normal shares of their mutual funds I have.
5
votes
1answer
17k views

mutual fund types: value vs blend vs growth

There are many types of mutual funds. Without considering specialty funds or other particular categories (EG emerging markets, real estate, etc), what's the difference between the following 3 types? ...
5
votes
3answers
402 views

Are wash sale rules different for stocks and ETFs / Mutual Funds?

In this answer to this question, JoeTaxpayer writes: To take the loss this year, he'd have to sell soon, and can't buy it back for 30 days. If, for whatever reason, the stock comes back a bit, he's ...
5
votes
3answers
364 views

What kind of services do mutual funds offer that their equivalent ETFs don't?

This answer by base64 mentions: Now you may ask why VTI is 0.03% while VTSAX 0.04%. That is because Vanguard of VTSAX provides service, while the service of VTI is provided by your broker. I don't ...
3
votes
2answers
588 views

U.S. Mutual Fund Supermarkets: Where are some good places to buy mutual funds?

What are the options for mutual fund supermarkets? Which ones do people use and why?
14
votes
3answers
860 views

Should I "hedge" my IRA portfolio with a life cycle / target date mutual fund?

I'm fully contributing to my Roth IRA every year into a brokerage account that is 100% in mutual funds. I've done basic mutual fund research and picked about 5 different funds that match what would ...
11
votes
1answer
377 views

What is a "closed-end fund"? How is a closed-end fund different from a typical mutual fund?

I recently ran across the term "closed-end fund", but the author didn't explain what it was. What is a "closed-end" fund vs a typical mutual fund, and are there advantagets/disadvantages to each?
10
votes
3answers
5k views

Do "growth of $10k" charts for mutual funds account for fees? I've found conflicting information

I've had several people advise me that the growth of $10k charts that you see for mutual funds, and provided by, e.g., Morningstar, account for the expense ratio of that fund (but not sales loads). So ...
9
votes
2answers
565 views

Invest in low cost small cap index funds when saving towards retirement?

This is a question about "Personal investing and asset allocation". About me: I earn more than I spend I may retire in 15 or 20 years, and I have savings to be invested in something or managed ...
5
votes
1answer
200 views

Taxes for resident alien investing in mutual funds and money market funds?

As a resident alien working in the US, what kinds of taxes will I be liable for when investing in mutual funds and money market funds? Some funds are federal, state, or municipal tax-exempt, will ...
5
votes
1answer
395 views

Mutual fund invests in mostly the same stuff as ETF, but has much higher expense ratio? (biotech sector)

Looking at two funds, FBIOX and IBB, it seems that they mostly invest in the same things (at least the top 10 holdings are roughly similar), but the expense ratio for FBIOX is .81% vs. .48% for IBB. ...
5
votes
1answer
521 views

Which index fund or ETF should I buy, assuming my money is at a specific company?

If you aren't familiar with the 3 fund portfolio, the summary is that when investing in stocks, you should only be buying total market index funds. The 3 index funds represent: total US, total non-us (...