FIN 352: Investments I  -   Professor Dow
    Part I. Investing Basics

 

Topic  3. Indirect Investing

 

The most common way for an individual to invest is through a mutual fund. This topic examines how mutual funds (and related investments) work.

Reading: Jones, Chapter 3

Lecture:  How Mutual Funds Work (in class)

Lecture:  Getting Information about Mutual Funds Online (in class)

Assignments:

Assignment 3: Find information about an actively-managed stock fund

Assignment 4: Find information about a bond fund.

Flash Cards

Flash Cards - PDF

 

Supporting Links:

For several assignments you are required to find information about actual mutual funds. You can use any mutual fund company, but here are links to two major mutual fund companies with a wide range of offerings.

Vanguard

Fidelity

These links provide basic information of how mutual funds work. They mostly overlap material covered in the text. The links are to the Investment Company Institute which is a trade group for the mutual fund industry.

A Basic Introduction to Mutual Funds (pdf)

Understanding Mutual Funds (pdf)

A Guide to Mutual Funds (pdf)

When comparing mutual funds you want to look at performance and expenses. These links cover the basics.
Comparing Mutual Fund Performance (pdf)

Mutual Fund Fees (pdf)
The most common way of indirect investing is through what is called an "open-end" mutual fund. However, there are several other kinds of funds:

ETFs (pdf)

Unit Investment Trusts (pdf)

Closed-End Funds (pdf)

The Difference between Mutual Funds and Hedge Funds