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Mutual Funds

The Basics of Mutual Funds

Mutual funds were first created in the 1920s. Today, millions of Americans depend on these investments to build retirement savings. To better manage your assets, it’s essential to understand the basics of how mutual funds operate.

What is a Mutual Fund?

Mutual funds are investments that pool the money of many investors to buy securities, such as stocks, bonds, cash investments, or some combination of the three.

Mutual funds are managed by professionals, who oversee the funds on behalf of shareholders. By their very nature, mutual funds offer diversification that may help reduce risk while increasing the overall return potential of the investment. If one security held by a mutual fund loses value, another security may rise in value, offsetting the loss.

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EMAIL: WFSOperationsTeam@woodmen.org
CALL: 1-877-664-3332
MAIL: Woodmen Financial Services, Inc.
1700 Farnam Street, Suite 600
Omaha, NE 68102-2015

Investments are available through Woodmen Financial Services, Inc. (WFS). Visit our About page to learn more and access the Regulation Best Interest Disclosure and the Customer Relationship Summary.

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Types of Mutual Funds

Stock Funds

Stock funds invest in public companies that sell shares on the stock market. In this category there are several types, including growth funds that invest in companies whose earnings are expected to increase faster than the overall market. In contrast, value funds typically focus on stocks that the portfolio manager believes are selling for less than they are worth. Funds are also divided into small cap, mid cap and large cap, depending on a company’s market capitalization, which is its share price times the number of shares outstanding. Small-cap stocks normally carry more market risk than large-cap issues.

Fixed-Income Funds

Fixed-income funds invest in bonds issued by government agencies and corporations. Unlike direct bond investments, these funds do not mature, so your principal will not be repaid unless you sell your future holdings. They also do not offer guaranteed interest payments. Fixed-income funds may lose value if interest rates rise, but in general they are less risky than many types of stock funds1.

Connect with WoodmenLife

Ultimately, you’ll want to choose a mutual fund (or funds) with the potential to complement your financial goals, timeline and risk tolerance. Contact your WoodmenLife Financial Representative today to find out more.

Disclosures

  1. U.S. Treasury bills/U.S. government bonds are guaranteed as to principal and interest payments (although the funds that invest in them are not), while stocks will fluctuate in share price. However, the returns of U.S. Treasury bills/U.S. government bonds historically have not outpaced inflation by as great a margin as stocks, although past performance cannot guarantee future results.

WEB58 - 1/11/2022

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© 2022 Woodmen of the World Life Insurance Society
Omaha, Nebraska

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Securities are offered through Woodmen Financial Services, Inc. (WFS), 1700 Farnam Street, Omaha, NE 68102, 877-664-3332, member FINRA/SIPC, a wholly owned subsidiary of Woodmen of the World Life Insurance Society (collectively “WoodmenLife”). Securities other than the WoodmenLife Variable Annuity are issued by companies that are not affiliated with WoodmenLife. This material is intended for general use with the public. WFS is not providing investment advice for any individual or any individual situation, and you should not look to this material for any investment advice. WFS has financial interests that are served by the sale of these products or services.

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