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management of the fund and 2) the diversification of risk over a number of investments. These two factors can make mutual funds a useful part of an individual, estate or business investment strategy as it hedges against risk. However, investing solely in mutual funds may also create risk because mutual funds are not entirely immune from investment risk and may not guarantee returns or value of initial investment.

ALTERNATIVES TO MUTUAL FUNDS:

Alternatives to mutual funds include Exchange Traded Funds (ETF), Unit Investment Trusts (UIT), Treasury Inflation Protected Securities (TIPS), Real Estate Investment Trusts (REIT) and Certificates of Deposit (CD) among several other options be it via investment in physical property, business or asset classes such as art, antiques, or vehicles. In other words, the number of choices an investor has is broad, and mutual funds represent only a fraction of the available choices. Consequently, being able to weigh the advantages and disadvantages of one investment over another is essential for investment success, risk level and investment goals. How well a mutual find is capitalized i.e. its size and capacity to invest, the performance of the companies and/or financial products the fund invests in, and the tax implications or lack thereof on investing through certain funds can all be relevant when choosing to invest in a mutual fund.

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