Mutual Funds, Past Performance

This year's top-performing mutual funds aren't necessarily going to be next year's best performers. It’s not uncommon for a fund to have better-than-average performance one year and mediocre or below-average performance the following year. That's why the SEC requires funds to tell investors that a fund's past performance does not necessarily predict future results. You can learn what factors to consider before investing in a mutual fund by reading Mutual Fund Investing: Look at More Than a Mutual Fund's Past Performance. You can also learn more about investment performance claims by reading Investor Bulletin: Performance Claims..

Mutual Fund Redemptions

A mutual fund company generally must pay redemption proceeds to a shareholder within seven days of receiving a redemption request from the shareholder. Exceptions apply on days when the New York Stock Exchange is closed, during certain emergencies, or when the SEC issues an order delaying redemptions to protect shareholders in the fund.

529 Plan Sponsor

A state, a state agency or educational institution that chooses a plan manager and determines the rules and limits for its plan.

529 Plan or Program Manager

A financial services firm — a mutual fund company, a brokerage firm, an investment adviser, or an insurance company — that handles all of the transactions and investments within the plan.

529 Plan Offering Circular

529 plan document that has detailed information about the 529 plan; often called a disclosure statement, disclosure document, program description, or offering document.

529 Account Owner

A person who establishes an account for a student to save money for qualified higher education expenses or tuition for elementary or secondary public, private, or religious schools; also called the account holder or the saver.

Breakpoint Discounts

Some mutual funds that charge front-end sales loads will charge lower sales loads for larger investments. For example, a fund might charge a 5% front-end sales load for investments up to $25,000, but reduce that to a 4% load for investments between $25,000 and $50,000 and 3% for investments exceeding $50,000. The investment levels required to obtain a reduced sales load  are commonly referred to as "breakpoints."

Mutual Fund Classes

Some mutual funds offer investors different types of shares, known as "classes."  Each class invests in the same portfolio of securities and has the same investment objectives and policies.  But each class has different shareholder services and/or distribution arrangements with different fees and expenses.  Because of the different fees and expenses, each class will likely have different performance results.

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