Mutual Funds

Mutual Funds in the United States

A mutual fund is a type of investment vehicle. They are usually marketed as an easy way for people to invest in a type of assets or according to a particular investment philosophy that would be difficult for individuals to manage on their own. Investors can generally buy and sell shares in the fund at any time, which makes them attractive to investors. The fund gets various fees for its services, often a percentage of the money invested, which makes them attractive to mutual fund companies.

Legal Materials

Calculator: Kiplinger posts Mutual Fund Tools and Calculators that figure things like, “How much do fees affect my return?.” CNN/Money posts a calculator that figures the Taxable Equivalent Yield for a tax-free fund, or vice versa.

Directors: Information about the directors on a mutual fund’s board are published in the fund’s “Statement of Additional Information” (SAI). This includes the directors’ names and compensation, the other boards they sit on, and their personal holdings in the fund. Pimco Funds, Janus and a few other companies make SAIs available on their Web sites; otherwise, you have to call the company and ask for a copy.

Foreign Funds: Equivalents to mutual funds are known as: “unit trusts” or OEICs in the United Kingdom, Australia and Hong Kong; SICAVs and Fonds Commun de Placement (FCPs) in France and Luxembourg; KAGs or AVSVs in Germany; UCITs in other parts of Europe; and “investment trusts” in Japan.

Laws & Regulation: Mutual funds are subject to most of the major securities laws (the Securities Act, the Exchange Act, etc.). The CCH Mutual Funds Guide is a 2-volume looseleaf service compiling the relevant Federal and state laws in one source. See also the separate entry for “Securities Laws” in this Guide. Mutual Funds: Law and Practice (Law Journal Press) discusses the relevant securities and tax laws as well as the business side of operating mutual funds.

Performance: Mutual funds report their performance in their annual reports. You can get a chart of a fund’s historical performance from Yahoo! Finance. The annual CDA/Wiesenberger Investment Companies Yearbook gives an overview of how each mutual fund did during a given year. The Wall Street Journal publishes a Quarterly Mutual Fund Guide, based on Lipper data, that runs near the beginning for January, April, July and October.

Quotes and Performance: For current mutual quotes, look in the newspaper, or use quote search on Yahoo! Finance or MarketWatch or another free Internet quote provider. For historical quotes, use the services listed in the separate entry for “Stock Prices.”

Ratings: Morningstar posts detailed “QuickTake” Reports in the “Research” section of its Internet site, which includes most of what you want to know about a mutual fund. For even more detailed information, look up the fund in Morningstar Mutual Fund Ratings.

The other major source for fund ratings is Lipper. Lipper data is used in the Forbes bi-annual rankings (in the February and August issues), the Wall Street Journal Quarterly Mutual Fund Guide (discussed below), and several other places.

Statement of Additional Information: See “Directors,” above.

Mutual Funds and the State Laws

Select from the list of U.S. States below for state-specific information on Mutual Funds:

Resources

See Also

Stock Prices
Bond Prices
CUSIP Numbers
Securities and Exchange Commission
Securities Laws
Unit Trusts

Further Reading

Mutual Funds: Open and Free Legal Research of US Law

Federal Primary Materials

The U.S. federal government system consists of executive, legislative, and judicial branches, each of which creates information that can be the subject of legal research about Mutual Funds. This part provides references, in relation to Mutual Funds, to the legislative process, the federal judiciary, and the primary sources of federal law (cases, statutes, and regulations).

Federal primary materials about Mutual Funds by content types:

Laws and Regulations

US Constitution
Federal Statutory Codes and Legislation

Federal Case Law and Court Materials

U.S. Courts of Appeals
United States courts of appeals, inclouding bankruptcy courts and bankcruptcy appellate panels:

Federal Administrative Materials and Resources

Presidential Materials

Materials that emanate from the President’s lawmaking function include executive orders for officers in departments and agencies and proclamations for announcing ceremonial or commemorative policies. Presidential materials available include:

Executive Materials

Federal Legislative History Materials

Legislative history traces the legislative process of a particular bill (about Mutual Funds and other subjects) for the main purpose of determining the legislators’ intent behind the enactment of a law to explain or clarify ambiguities in the language or the perceived meaning of that law (about Mutual Funds or other topics), or locating the current status of a bill and monitoring its progress.

State Administrative Materials and Resources

State regulations are rules and procedures promulgated by state agencies (which may apply to Mutual Funds and other topics); they are a binding source of law. In addition to promulgating regulations, state administrative boards and agencies often have judicial or quasi-judicial authority and may issue administrative decisions affecting Mutual Funds. Finding these decisions can be challenging. In many cases, researchers about Mutual Funds should check state agency web sites for their regulations, decisions, forms, and other information of interest.

State rules and regulations are found in codes of regulations and administrative codes (official compilation of all rules and regulations, organized by subject matter). Search here:

State opinions of the Attorney General (official written advisory opinions on issues of state law related to Mutual Funds when formerly requested by a designated government officer):

Tools and Forms

Law in Other Regions

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