Mutual Funs1.docVIP

Mutual Funds -pooling of savings ADVANTAGES - professional manager - diversification - liquidity - various types of funds - transfer within fund families - eligible for margin - acceptable as collateral DISADVANTAGES - unsuitable for short term investment - unsuitable as emergency reserve Structure OPEN END (Trust) CLOSED END (Corporation) - issue/redeem on continuous basis @ NAV - fixed # of units O/S - buy/sell to fund - can redeem any time - trade on stock exchanges - price based on underlying value of securities held - price based on supply/demand - usually at discount to