What are mutual funds? - Fidelity

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Mutual Funds and Mutual Fund Investing - Fidelity Investments

Clicking a link will open a new window. : Dividend income, which can be taxed either at long-term capital gains or ordinary income tax rates, depending on whether they’re qualified or non-qualified dividends Capital gains from the sale of securities, which can be taxed at different rates, depending on your situation

Fees

There are a variety of fees that may be associated with mutual funds. Some funds come with transaction charges for buys and sells or commissions known as loads. And there are funds that charge a redemption fee if you sell shares you've only owned for a short time. Investors also pay ongoing expenses to cover the cost of operating the fund; this includes investment advisory fees (paying the fund manager and the research staff), as well as transaction costs associated with buying and selling securities within the fund. When evaluating a fund, remember that fees play a factor and may potentially detract from a fund's performance over time. All Fidelity funds can be bought or sold with no transaction fees when you buy them through Fidelity.

Next steps to consider

Open an account with Fidelity to buy and sell mutual funds. Our tools make it easy for you to filter, sort, and compare funds until you find exactly what you are looking for. Become a better investor with investing ideas from our fund managers.

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Get a weekly email of our pros' current thinking about financial markets, investing strategies, and personal finance. Please enter a valid first name. e.g. John, D'Monte First name is required. First name can not exceed 30 characters. Please enter a valid first name. e.g. John, D'Monte Please enter a valid last name. e.g. Doe. Last name is required. Last name can not exceed 60 characters. Please enter a valid last name. e.g. Doe. Enter a valid email address. e.g. [email protected]. Email is required. Email address must be 5 characters at minimum. Email address can not exceed 100 characters. Please enter a valid email address. e.g. [email protected]. Thank you for subscribing. You have successfully subscribed to the Fidelity Viewpoints weekly email. You should begin receiving the email in 7–10 business days. We were unable to process your request. Please to go to Viewpoints signup page. Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully. Past performance is no guarantee of future results. The S&P 500 Index is a market capitalization-weighted index of 500 common stocks chosen for market size, liquidity, and industry group representation to represent US equity performance. Keep in mind, investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money. In general, the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk, liquidity risk, call risk, and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so holding them until maturity to avoid losses caused by price volatility is not possible. Foreign securities are subject to interest-rate, currency-exchange-rate, economic, and political risks. Stock markets, especially foreign markets, are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. Please note that tax information is general in nature and should not be considered tax or legal advice. Fidelity does not provide legal or tax advice. Consult with an attorney or tax professional regarding any specific legal or tax situation. The Fund Evaluator is provided to help self-directed investors evaluate mutual funds based on their own needs and circumstances. The criteria entered is at the sole discretion of the user and any information obtained should not be considered an offer to buy or sell, a solicitation of an offer to buy, or a recommendation for any securities. You acknowledge that your requests for information are unsolicited and shall neither constitute, nor be considered as investment advice by Fidelity Brokerage Services, LLC., Fidelity Distributors Corporation, or their affiliates (collectively, "Fidelity"). 611120.5.0

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