No matter what your retirement goals are, mutual funds can help you achieve your investment objectives.
A mutual fund pools the money of people who have a similar investment objective, such as long-term growth or steady income. When you buy shares in a mutual fund, you and the other investors participate in the gains and losses of the fund’s investments.
The fund’s investment adviser manages the fund and invests in securities that meet the fund’s investment objective, including:
The investment adviser takes the pool of money invested by the mutual fund’s shareholders and purchases these securities. All of the fund’s investors then own a proportionate share of each security. When mutual fund investors are ready to sell their shares, the fund is required to pay that day’s net asset value for each share redeemed.
A mutual fund can gain value when the securities it owns pay interest or dividends or when the securities themselves rise in value.
There are many advantages to mutual funds, including:
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.
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American Funds Distributors, Inc.
This content, developed by Capital Group, home of American Funds, should not be used as a primary basis for investment decisions and is not intended to serve as impartial investment or fiduciary advice.