Chapter 31. When to Choose an Alternative to Mutual Funds

As we have seen, investors now have new alternatives to mutual funds that they did not have before. ETFs, folio investing, and separately managed accounts have all become viable options. Although these alternatives are still small in terms of assets under management, you as an investor can take advantage of any of them now, or all three together if you wish. You can invest in a combination of mutual funds and any or all of these alternatives, or possibly forsake funds altogether. The question is, should you?

Let's say it again for emphasis: Mutual funds have been around for a long time, they have a clear track record, and many investors both understand, and are comfortable with, the mechanics of buying, owning, and selling mutual fund shares. There are no new terms to learn or different procedures to grapple with, and unlike the three new alternatives, there is a long track record that can be observed .

Mutual funds are well regulated under the Investment Company Act of 1940, a very successful piece of federal legislation. Mutual funds offer a variety of useful services, such as being able to write checks against your account with some funds, the ability to easily transfer assets out of one fund and into another in the same mutual fund family, and so forth.

So when should you consider one of the alternatives? I reemphasize here some points covered in earlier chapters, and make some new points as well.



Mutual Funds(c) Your Money, Your Choice... Take Control Now and Build Wealth Wisely 2002
Mutual Funds(c) Your Money, Your Choice... Take Control Now and Build Wealth Wisely 2002
ISBN: N/A
EAN: N/A
Year: 2004
Pages: 94

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