Rights of accumulation (ROA) is a term used in the mutual fund industry that refers to an investor's ability to reinvest their dividends and capital gains distributions back into the fund without having to pay any additional taxes on those distributions. This allows investors to compound their returns over time and potentially increase their overall investment returns.
What does a no load fund mean?
A no load fund is a mutual fund that does not charge a sales commission (load). Loads are charged by some mutual fund companies in order to compensate brokers and other sales professionals for selling their funds. No load funds are sold directly by the fund company, so no sales commission is charged. This allows investors to avoid paying a commission, which can save them money.
What are the three basic structures of mutual funds? There are three basic structures of mutual funds: open-end funds, closed-end funds, and exchange-traded funds (ETFs).
Open-end funds are the most common type of mutual fund. They are typically managed by professional money managers, and they can be bought and sold any time during the day at their current market value.
Closed-end funds are less common than open-end funds. They are typically not managed by professional money managers, and they can only be bought and sold at certain times during the day at their current market value.
Exchange-traded funds (ETFs) are a type of mutual fund that is traded on an exchange like a stock. They are typically managed by professional money managers, and they can be bought and sold any time during the day at their current market value.
What are the terms used in mutual funds? There are a variety of terms used in mutual fund investing, including but not limited to:
-Net Asset Value (NAV): This is the price of one share of the fund, typically calculated at the end of each trading day. It is equal to the total value of the fund's assets minus the fund's liabilities.
-Load: This is a sales charge that is paid by the investor when purchasing or selling shares of the fund.
-No-Load Fund: This is a fund that does not have a sales charge.
-Expense Ratio: This is the annual fee that all funds charge their shareholders to cover the costs of operating the fund.
-12b-1 Fee: This is a marketing fee that is charged by some funds to cover the costs of advertising and promoting the fund.
-Front-End Load: This is a sales charge that is paid by the investor when purchasing shares of the fund.
-Back-End Load: This is a sales charge that is paid by the investor when selling shares of the fund.
-Redemption Fee: This is a fee that is charged by some funds when an investor sells their shares.
-Minimum Investment: This is the minimum amount of money that an investor must put into a fund in order to purchase shares.
What is breakpoint how is it determined?
A breakpoint is the point at which an investor's investment in a mutual fund reaches a certain level and the investor becomes eligible for reduced fees. The breakpoint is typically determined by the amount of money the investor has invested in the fund. What are the 4 types of mutual funds? The four types of mutual funds are equity funds, bond funds, money market funds, and balanced funds.
Equity funds are mutual funds that invest in stocks. Bond funds are mutual funds that invest in bonds. Money market funds are mutual funds that invest in short-term debt instruments. Balanced funds are mutual funds that invest in a mix of stocks and bonds.