A mutual fund is a way for many people from all walks of life to put their money together and have it managed by investment professionals. Mutual funds combine smaller deposits from individual investors in order to make larger purchases in stocks or bonds. Most mutual funds are available to both individual investors and large companies or charitable organizations.
There are essentially three broad types of mutual funds:
Asset Allocation or Balanced Funds (stocks and bonds in the same fund)
Balanced funds are for investors who prefer the simplicity of investing in a single fund that holds a mix of stocks, bonds and money market investments. The goal of these funds is to provide a balance between income and long−term capital growth by primarily investing in equities, bonds and money market securities. Income trusts, exchange traded funds and foreign equities may also be a part of a balanced fund. The proportion is usually based on the outlook for the economy and the financial markets.
Income Funds (long-term and short-term)
These funds aim to provide a relatively secure and steady stream of income, with moderate growth potential. They generally offer higher returns than savings-based investments and lower risk than equity-based investments. Income funds provide a steady income because they pay regular interest or dividend income, which you can reinvest or take as cash. Some income funds also provide potential for capital growth over time.
Equity Funds (diversified or specialty)
Equity funds are meant to achieve long−term capital growth by investing in a broad range of Canadian and foreign equities (stocks) from companies in a wide range of industries. Diversified funds simply refer to a more diverse portfolio, where a variety of industries and companies are invested in. Specialty funds refer investiments in the stocks of single industries or sectors (like the technology industry or the power transformer sector).
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Manulife Securities Investment Services Inc. is registered as a Mutual Fund Dealer, or its equivalent, with the provincial securities commissions and as such our Advisors are entitled to sell mutual funds and other approved securities as permitted under our registration. They may also be able to provide other services or products to you through their own business. As a member of the Mutual Fund Dealers Association of Canada ("MFDA"), Manulife Securities Investment Services Inc. is obligated to disclose to you that you may be dealing with companies other than Manulife Securities Investment Services Inc. when purchasing services or products from your Associate (remuneration to your Associate may also come from various sources depending on the services or products purchased). For example, your Associate may offer any one or more of the following through a separate business, which would not be the responsibility of Manulife Securities Investment Services Inc.:
* Deposit Instruments: GICs, Canada Savings Bonds;
* Fee for Service Financial Planning;
* Estate Planning;
* Tax Planning or Income Tax Preparation;
* Insurance: Life, Accident, Sickness, Disability, General.
Please be sure that you have a clear understanding of which company you are dealing with for each of your services and products. Your Associate would be happy to provide any clarification you require.
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.