Professional mangement: When you invest in a mutual
fund, you share the expense of having someone with qualifications
and a proven track record manage your money. Your share
receives the same attention, and gets the same returns,
as the money of all the other investors.
Easy way to invest: Most people buy their mutual
funds through a mutual fund sales person, stock broker,
service representative in a bank or credit union, life insurance
sales person or a financial planner. They'll answer your
questions and can be very helpful putting together a balanced
portfolio that fits your circumstances. Minimum deposits
very by fund but are usually not very high and deposits
can be made through automatic bank withdrawals if you wish.
Liquidity: It is easy to get at your money if you
need it. It is not as quick as withdrawing money from your
bank account, however. After the mutual fund company receives
your authorization, your money will be either sent to you
in the form of a cheque or deposited directly into your
bank account. Some companies also allow redemption by telephone
or fax, provided you authorize this when you initially buy
the fund.
Record keeping: All mutual fund companies provide
unitholders with regular statements detailing all transactions,
income earned, and the total value of all funds held. Moreover,
when you buy or sell units in a mutual fund, you automatically
receive written confirmation. You also receive yearly statements
detailing the tax status of all earnings in your non-registered
funds, including dividends and capital gains information.
The fund company issues either a T3 or a T5 slip for tax
purposes, listing the type and amount of income you must
report on your income-tax return.
