Types of Mutual Funds and some basic terminlogies

1) Open-end mutual fundAn open-end mutual fund is a collective investment which can issue and redeem shares at any time. An investor can purchase shares in such funds directly from the mutual fund company, or through a brokerage house. An open-end fund issues new shares as new investors invest in the fund

2) Closed-end FundsA pooled investments fund that has a fixed capitalization after the initial issue. Fund shares are bought from or sold to other investors in the over-the-counter market or traded on an exchangeA closed-end fund limits the number of shares available


Mutual fund categories

aggressive growth fund,asset allocation fund,balanced fund,blend fund,bond fund,capital appreciation fund,clone fund,closed fund,crossover fund,equity fund,fund of funds,global fund,growth fund,growth and income fund ,hedge fund,income fund,index fund,international fund,moneymarket fund,municipal bond fund,prime rate fund,regional fund,sector fund,speciality fund ,stock fund and tax-free bond fund.

Net asset valueThis is the total value of assets the investment company holds, minus the total value of liabilities. This total is then divided by the total number of shares outstanding. This value reflects the ups and downs of the value of the underlying securities held by the fund.

Example, if a mutual fund has an NAV of $100 million, and investors own 10,000,000 of the fund’s shares, the fund’s per share NAV will be $10. Because per share NAV is based on NAV, which changes daily, and on the number of shares held by investors, which also changes daily, per share NAV also will change daily.

NAV) represents a fund's per share market value. This is the price at which investors buy ("bid price") fund shares from a fund company and sell them ("redemption price") to a fund companyBecause mutual funds distribute virtually all their income and realized capital gains to fund shareholders, a mutual fund's NAV is relatively unimportant in gauging a fund's performance, which is best judged by its total return.

An investment company calculates the NAV of a single share (or the "per share NAV") by dividing its NAV by the number of shares that are outstanding.