StateTrust is a recognized leader in serving the financial needs of individuals and families with asset management and global wealth management solutions. Our Investment Advisors are ready to help clients meet their investment needs by providing a complete range of mutual funds and investment solutions.
A mutual fund is a professionally managed collective investment security that pools money from many investors and invests typically in a pool of investment securities (stocks, bonds, short-term money market instruments, other mutual funds, other securities, and/or commodities such as precious metals). The mutual fund will have a fund manager that trades (buys and sells) the fund's investments in accordance with the fund's investment objective.
The number of mutual funds has grown dramatically over the last decade, with more than 24,000 funds now available.
Source: StateTrust’s analysis of Morningstar data. Performance shown is not indicative of the performance of any specific investment. An investor cannot invest in an index, such as the one these graphs are based on. Past returns are no guarantee of future performance. These returns are based on historical information, from sources believed to be reliable, but accuracy cannot be guaranteed, and these returns can vary in future time periods.
Advantages of Mutual Funds
Among the advantages of Mutual Funds are:
* Diversification does not guarantee a profit or ensure against loss.
Mutual Fund Investment Categories
Mutual funds are often categorized by their investment objective or the assets in which they invest.
* Income maybe subject to the Alternative Minimum Tax (AMT)
Mutual Fund Share Types
Mutual funds can also be classified by their fee structure into three broad share class categories: A, B, and C. The share class generally indicates the fees associated with investing in a particular mutual fund. Investors can select a fund share class that is best suited to their investment goals.
|"A" Shares||Class A shares charge a front-end sales fee and are often an attractive choice for investors seeking to invest a large amount of capital for a long period of time. A shares offer discounts on the front-end sales charge, also known as breakpoints, to investors willing to invest in excess of a certain dollar amount. Fees associated with this share class tend to be lower than B or C shares|
|"B" Shares||Class B shares do not have any front-end sales charges. They do, however, charge a contingent deferred sales fee that declines over time. Fees associated with this share class tend to be higher than A shares. At the end of a seven- or eight-year time period, B shares typically convert to Class A shares.|
|"C" Shares||Class C shares are exempt from front-end charges and usually include a lower contingent deferred sales charge than B shares. Unlike Class B shares, fees do not decrease with the passage of time and C shares do not convert to A shares.|
Evaluating Mutual Fund Style
Style analysis is an analytical technique used to understand investment style and identify the characteristics of a fund or portfolio. The two principal methods of style analysis are holdings-based style analysis and returns-based style analysis.
Mutual Fund Fees
There may be a percentage charge levied on the purchase or sale of shares or 'front-end load'/'back-end load'. This charge may represent a profit or cost coverage to the fund manager for the distribution, commissions, advising and brokerage that arranged the purchase and/or sale. These fees are commonly referred to as 12b-1 fees in the U.S. Not all fund have initial charges; if there are no such charges levied, the fund is "no-load".
Net Asset Value
Mutual Funds are priced by Net Asset Value or ("NAV"). This is the price per share, calculated by dividing the fund's assets minus liabilities by the number of shares outstanding. This is usually calculated at the end of every trading day.
Glossary of Mutual Fund Terms
|Asset-Based Sales Charges||These are fees you would not pay directly, but which are taken out of a mutual fund's assets to pay to market and distribute its shares.|
|Breakpoint Discounts||Discount offered on the front-end sales charge if you: make a large purchase, already hold other mutual funds offered by the same fund family or commit to regularly purchasing the mutual fund's shares.|
|Closed-End Fund||Money can only be raised in a single offering, much the way a stock issue raises money for the company only once, at its initial public offering, or IPO.|
Contingent Deferred Sales
|Fee charged when you sell your mutual fund shares.|
|Expense Ratio||A measure of the fund's total annual expenses expressed as a percentage of the fund's net assets.|
|Fee charged when you purchase mutual fund shares.|
|Open-End Fund||investors can buy and sell shares at any time.|
|12b-1 fees||Marketing and distribution Fees. Capped at 1 percent of your assets in the fund, these fees are taken out of the fund's assets to pay for the cost of marketing and selling the fund and some shareholder services.|
Investors should carefully review the objectives, risks, charges and expenses of any investment company before investing. Prospectus and, if available, the summary prospectus, contains important information about the investment company. You can contact us to request our prospectus, which we encourage you to read carefully. The value of your investment may fluctuate, and when redeemed, shares may be worth more or less than their original cost. Investments in a fund (Investment Company) are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
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