1. What is a Mutual Fund? Brings groups of investors together Brings groups of investors together Actually buying shares of the fund Actually buying shares of the fund Number of shares depend upon investors Number of shares depend upon investors Net Asset Value (NAV) issues Net Asset Value (NAV) issues Data Source: Morningstar Investing Classroom

2. Mutual Fund Benefits Easy to buy and sell Easy to buy and sell Financial Advisors Financial Advisors Directly through fund family Directly through fund family Fund Supermarkets (e.g. 401k) Fund Supermarkets (e.g. 401k) Regulated and Professionally managed Regulated and Professionally managed Data Source: Morningstar Investing Classroom

3. Quick Quiz Investing in a stock mutual fund does NOT offer you A. I ndirect ownership of a group of companies B. R egulation by the SEC C. A n insured investment Answer is “C” Data Source: Morningstar Investing Classroom

4. Quick Quiz A fund’s price per share is called its: A fund’s price per share is called its: A. Stock price B. Net Asset Value (NAV) C. Initial Investment Answer is “B” Answer is “B” Data Source: Morningstar Investing Classroom

5. Quick Quiz Who owns Fidelity Magellan Fund? Who owns Fidelity Magellan Fund? A. Fidelity B. Fidelity Magellan’s Board of Directors C. Fidelity Magellan’s shareholders Answer is “C” Answer is “C” Data Source: Morningstar Investing Classroom

6. Quick Quiz Which of the following statements is false? Which of the following statements is false? A. When you own a fund, you own all the securities in that fund; when you sell the fund, the fund transfers ownership of those securities to you B. When you own a fund, you pay a manager to choose securities for you C. You can sell a closed fund, but you cannot buy one Answer is “A” Answer is “A” Data Source: Morningstar Investing Classroom

7. Quick Quiz All mutual funds registered through the Investment Act of 1940 increase the number of shares by IPO’s, secondary offerings, and share repurchases. All mutual funds registered through the Investment Act of 1940 increase the number of shares by IPO’s, secondary offerings, and share repurchases. A. True B. False Answer is “B” Answer is “B” Data Source: Morningstar Investing Classroom

8. Coming Next: Mutual fund fees and taxes Mutual fund fees and taxes Down the road: Down the road: Mutual funds vs. I-shares Mutual funds vs. I-shares Best mutual funds of 2002 Best mutual funds of 2002 …and much, much more! …and much, much more! Data Source: Morningstar Investing Classroom