Mutual fund usually called for open-end investment company. Open-end mutual fund is most favorite’s investment company in US. At the end 1999, there are more than seven thousand mutual companies in US. Fidelity, Vanguard, Putnam, Dreyfus etc is the most well-management mutual fund company.

Which one is the best? It is depend on your view. Your aim investment may determine which funds fit with you.

There are types based on mutual fund investment policies are:

Equity funds, Mutual funds that invest in equity funds like stock. This fund is suitable for investors who like capital gain and dividend. Sometimes investment manager buy little portion fixed-income securities. Fixed income securities support mutual fund company to steady when investor liquidate the funds suddenly.

Equity funds differ on income fund and growth fund. Income fund refer to company stock with dividend, other side growth refers to focusing on capital gain.

Fixed income securities, Investment manager use fixed income securities for investing investor money. This mutual fund is ideal for medium term and long-term investor who want to avoid risk like pension, old officer, etc. Some companies invest their assets to specific fixed income securities like Municipal Bond, Government Bond, Debentures, Commercial Papers, Corporate Bond, T- Bills, etc.

Money market funds, Investment manager invest funds at highly liquidity money market instrument. They may put money at foreign currency certificate deposit. This fund is liquid. This fund is suitable for short-term investor like corporate and other business organization.

Balanced and Income Funds (hybrid), mutual funds that invest money at various investment vehicles likes bond, stock, money market, index, etc. Investment manager construct best portfolio to get higher profit. This fund fit with moderate investor. This fund is ideal for medium and long term.

Assets Allocation funds, Similar with balanced and Income Funds. Investment manager find to design high investment vehicle.

Index Fund, This fund buys index. Index represents index performance in capital market. E.g., S&P 500 Index fund is mutual fund represent S&P 500 Index. There is also other index like Dow Jones, NASDAQ, Wilshire 500, etc.

Newspaper provides information of mutual funds. Open-end mutual has obligation to publish NAV daily at newspaper. Meanwhile, close-end has obligation to publish NAV weekly at newspaper. You can see table noted NAV or Net Asset Value. You can notice that NAV of one mutual fund is different day by day. Sometimes NAV rise, other day NAV descends.

NAV should changes because the difference between NAV can result capital gain. Investor expect NAV rise after they buy mutual fund. The best performance manager will provide good capital gain. Suppose, three months ago, you bought mutual funds for $ 25. Today your mutual fund price is about $ 30. So you can get capital gain for $5 ($30 -$25).

So, what is NAV? NAV is price of shares mutual fund. NAV price is similar with company stock price. You can buy mutual fund at NAV that effective that day. Today, information announced a mutual fund NAV is about $25 so you can buy mutual fund for $25.

How can NAV count? NAV is total assets of mutual funds minus liabilities divided by total number shares of outstanding. Suppose one mutual fund has stock that has market value $ 125 million. They have liabilities $25 million including owe to advisers, rent, wages due etc. That mutual fund offers 5 million shares to investors. NAV of mutual funds are: ($ 125 million - $ 25 million) / 5 million = $ 20.

Mutual fund has some assets from investment vehicle. They invests investor money to stock, bonds, index, etc. The assets vary day by day because stocks, bonds, index move volatility. Stocks that invested may give dividend periodically especially blue chip stock. Meanwhile, bonds pay interest semi-annually except zero coupon bonds. Money market mutual fund also invests in certificate deposits so they can get interest periodically. This is explaining that NAV can change day by day. A mutual fund has liabilities too. Liabilities can reduce NAV value. Sometimes mutual fund has liabilities. They owe money to others financial institution and they owe for salary officer, office rent, miscellaneous expenses etc.