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Funds 105: How to Purchase a Mutual Fund

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1.
Investing with one of the more diverse fund families or a fund supermarket _______.
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Limits your paperwork. Investing all in one place makes recordkeeping easier and makes moving to and from funds a snap, too. And as long as you stick with one of the largest fund families, you'll have plenty of diversification options, too.
2.
Buying mutual funds from a single, large fund family will always provide you a diverse range of offerings to choose from.
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False. Some families, despite being large, specialize in a narrow range of funds.
3.
No-transaction fee networks charge _______.
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Fund companies for being part of the network. There are no up-front costs with a no-transaction fee network. The networks charge funds for being included, and funds very often pass along these charges to all shareholders (whether or not they invest via a supermarket) in their expense ratios.
4.
When you buy a load fund through an advisor, where does the load that you pay go?
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To your advisor. Loads are commissions that are paid to advisors. Fund managers receive a portion of the fund's management fee.
5.
A justification that some do-it-yourself mutual fund investors use for buying no-load funds is that _______.
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Since they are not getting investment advice in return, why pay a commission? For this reason, many prefer no-load funds.