welcome     Aeropuertos   Hospitales   Clima   Herramientas   Traductor    Definitions
Seguros Viajeros
Global Int Medical
TermLife Enlinea
Historia / Misión
Toll Free USA
Insurance may not
be sold or used
In or From Costa Rica.

United Kingdom  Mexico  Columbia  Spain  Canada  Argentina  Peru  Venezuela  Chile  Germany  Ecuador  Guatemala  Cuba  United States of America  Bolivia  France  Nicaragua  Dominican Republic  Honduras  Paraguay  Australia  El Salvador  Costa Rica  Puerto Rico  Japan  Panama  Urugray  Equatorial Guinea

Mutual Funds
Investors Manual
The information is the best
tool for investors

Mutual Funds
In the last decade, American investors
have increasingly turned to mutual funds with
the purpose of saving for your retirement and for others
economic objectives. Mutual funds can offer
the advantages of diversification and professional management. Without
However, as with other investment options,
Investments in mutual funds present risks. Y
commissions and taxes will decrease the income of the
background. It is worth understanding what the aspects are
positive and negative investments in mutual funds,
and how to choose those products that match
your goals and tolerance towards risks.
This brochure explains the fundamental issues of the
investments in mutual funds, how the
mutual funds, what factors should be taken into account
before investing and how to avoid the most common hazards.
US Securities and Exchange Commission
Office of Investor Education and Advocacy
100 F Street, NE
Washington, DC 20549-0213
Toll-free line: (800) 732-0330
Website: www.investor.gov

What does it consist on . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Characteristics of the funds. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Advantages and disadvantages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Different types of funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
How to buy and sell shares. . . . . . . . . . . . . . . . . . . . . . 12
How funds can earn money for you. . 12
Degrees of risk. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . fifteen
Classes of funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Tax consequences . . . . . . . . . . . . . . . . . . . . . . . . . . . twenty
Information sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Performance in the past. . . . . . . . . . . . . . . . . . . . . . . . . . . 26
How to see beyond the name of a fund. . . . . . . . . . . . . . . 27
Banking products versus mutual funds. . . . . . . . . . . . . . . . 28
IF YOU HAVE PROBLEMS. . . . . . . . . . . . . . . . . . . . . . . . .29
WITH THE MUTUAL FUNDS. . . . . . . . . . . . . . . . . . .30

Key Issues
They must remember
Mutual funds are not guaranteed or insured by the
Federal Deposit Insurance Corporation (FDIC, for its
acronyms in English) or by any other government agency,
even if you buy them through a bank and the fund carries the
name of the bank. You can lose money by investing in funds
Performance in the past is not a reliable indicator
on performance in the future, so that it does not
dazzle for the high performance of the previous year. Without
However, performance in the past can help you
Evaluate the volatility of a fund over time.
All mutual funds have costs that reduce the
income from your investment. Investigate different offers and
investigate and compare costs.

How the Funds Work
A mutual fund is a company that collects money from many
investors and invests the money in stocks, bonds, instruments
of the short-term money market, other securities or assets, or
some combination of these investments. The set of assets
that the mutual fund owns is known as its portfolio. Every
share represents the proportional ownership of an investor
of the assets of the fund and the income generated by these assets.
Legally known as an "unlimited capital company", a fund
Mutual is one of the three fundamental types of investment companies.
While this brochure only talks about mutual funds, you should have
present that there are other means of joint investment and that
possibly offer features that you want. The other two
fundamental types of investment companies are:
• Limited funds that, unlike mutual funds, sell to the
time a fixed amount of shares (in an initial public offering) that
forward they are listed on a secondary market; Y
• Units in investment companies (UIT, for its initials
in English), which make a one-time public offer of only one
specific and fixed amount of redeemable securities called "units" and
that will conclude and dissolve on the date stipulated at the time
of the creation of the ITU
"Funds quoted on the stock exchange" (ETF, for its acronym in English) are
a type of investment company that aims to get the same
performance than a particular market index. They can be companies
of unlimited capital or ITU. However, ETFs are not considered or
It allows them to be called mutual funds.

"Protection Fund" is a general (non-legal) term that is used
to describe private investment funds outside of the list that
traditionally they have been limited to rich and sophisticated investors.
Mutual funds are not mutual funds and, as such, they are not
subject to the numerous rules that apply to mutual funds
for the protection of investors, including rules that require a
certain degree of liquidity, the rules that require fund shares
mutually redeemable at any time, the rules that protect
against conflicts of interest, the rules to guarantee impartiality in
the pricing of the fund's shares, the disclosure rules,
the rules that restrict the use of leverage, etc.
The "Funds of protection funds", a type of investment product
relatively new, are investment companies that invest in
protection funds. Some, though not all, register with the SEC
and submit semi-annual reports. They often have minimum thresholds
investment costs lower than traditional protection funds
out of list and can sell their shares to a greater amount of
investors Like the protection funds, the funds of the
Protection funds are not mutual funds. Unlike the funds
Mutuals of unlimited shares, funds of protection funds
they offer very limited redemption rights. And unlike ETFs,
their actions are typically not listed in an exchange.
For more information about protection funds, contact
we suggest you read our publication entitled Hedging Your Bets: A Heads
Up on Hedge Funds and Funds of Hedge Funds at http://www.sec.gov/
answers / hedge.htm.
For more information about the funds of the funds of
protection, we suggest you read the Investor Alert of the Authority
Financial Industry Regulator (FINRA) entitled
Funds of Hedge Funds-Higher Costs and Risks for Higher Potential
Returns at www.finra.org .
Between the traditional and distinctive features of the funds
mutual are the following:

➣ Investors buy the mutual fund shares of the
fund itself (or through a broker for the fund), instead of
buy them from other investors in a secondary market, such as
the New York Stock Exchange or the Nasdaq Stock Market.
➣ The price that investors pay for the shares of
mutual funds is the net asset value (NAV)
in English) by fund action, plus any commission from the
shareholder that the fund imposes at the time of purchase
(such as charges for sales of securities).
➣ Mutual fund shares are "redeemable", which means
that investors can sell their shares back to the
fund (or a broker representing the fund).
➣ Usually, mutual funds create and sell new shares
to take into account the new investors. In other words,
they sell their shares continuously, although some funds leave
to sell when, for example, they become too big.
➣ Mutual fund investment portfolios administer them
typically separate entities known as "advisors to
investments "that appear registered with the SEC.
Each investment has advantages and disadvantages. However, it is important
remember that the features that can be important for
An investor may not be for you. The fact that a
particular feature represents an advantage for you will depend
of its exclusive circumstances. For some investors, the funds
mutual funds offer an attractive investment option because,
Generally, they offer the following characteristics:
• A professional administration : professional managers
of securities portfolios investigate, choose and supervise the
performance of the securities purchased by the fund.

• Diversification: diversification is an investment strategy
that can be clearly summarized as "do not have to gamble
all to a letter. " If you distribute your investments in a wide
variety of companies and industrial sectors can help
reduce your risks if a company or a sector fails. To some
investors find it easier to achieve diversification to
through the ownership of mutual funds instead of doing so
through ownership of individual stocks or bonds.
• A sequibilidad: some mutual funds take into account
to investors who do not have a lot of money to invest,
setting sums in relatively low dollars for purchases
initials, for subsequent monthly purchases, or both.
• Iquidity: investors in mutual funds can redeem
easily your actions to the current NAV (plus any type of
fees or charges charged at the time of redemption)
However, mutual funds also have characteristics
that some investors might consider as disadvantages,
such as:
• C osts despite negative returns: investors
they must pay sales expenses, annual commissions and other
expenses (of which we will talk in detail on the page
13), regardless of how the fund performs.
And depending on the time of the investment, it is possible that the
investors also have to pay taxes on any
distribution of capital gains they receive, even if it results
that the fund performs poorly after they
have bought the shares.
• High control f: typically, investors can not
find out the exact composition of a fund's portfolio in
any given moment, nor can they directly influence

about what values ​​the fund manager buys or sells
about the time those businesses are made.
• Uncertainty in prices: with an individual action,
You can get information about prices in real time (or
approximately in real time) with relative ease, through
of inquiries to financial sites on the Internet or calls to your
runner. You can also check the changes in the prices of
the action from hour to hour, or even from second to second. In
change, with a mutual fund, the price at which you buy or
redeems shares will typically depend on the fund's NAV, which
the fund could not calculate until many hours after
that you have placed your order. Usually, mutual funds
they must calculate their NAVs at least once each business day, typically
after the main US stock exchanges close UU
When it comes to investing in mutual funds, investors
They literally have thousands of options. Before
invest in any given fund, decide if the strategy
and the investment risks of the fund suit you. The first
step for a successful investment is to be clear about what your
economic objectives and their tolerance for risks, whether
by itself or with the help of a finance professional. A
Once you know what you're saving for, when you'll need the money
and how much risk you can tolerate, you can reduce your options with
greater ease.
The majority of mutual funds can be subdivided into
three main categories: money market funds;
bond funds (also called "fixed income" funds);
and stock funds (also called "capital" funds).
Each type has different characteristics and different risks
and rewards. In general, the higher the income
potential, the greater the risk of loss.

Money market funds
Money market funds have relatively few
risks, if compared to other mutual funds (and with the
most other investments). According to the law, they can only invest
in certain high-quality and short-term investments issued by
the US government, by American corporations,
and by state and municipal governments. Market funds
monetary policy seek to preserve their net asset value (NAV), which
represents the value of an action in a fund, at a stable value
of one dollar per share. However, it is possible for the NAV to fall
below one dollar if the fund's investments perform
mediocre Although the losses of the investors have
been rare, yes they are possible.
Money market funds pay dividends that, for
generally, they reflect short-term interest rates and, historically,
revenue for money market funds have been
lower than those of bonds and stock funds. For this the
"Inflation risk" (the risk that inflation will leave behind and
will erode investment income over time) can
be a potential concern for investors in
money market funds.
Bond funds
In general, bond funds have higher risks than
money market funds, largely because of
typically they follow strategies oriented towards the production of
higher yields. Unlike market funds
monetary, SEC rules do not restrict bond funds
to high-quality or short-term investments. Because there are
many different types of bonds, bond funds can
vary drastically in your risks and rewards. Some of the
Risks related to bond funds include:
Credit risk: the possibility that companies or others
issuers, whose bonds are owned by the fund, may default

with the payment of their debts (among them, the debt to the holders of
your bonuses). Credit risk is not that important for
bond funds that invest in guaranteed bonds or bonds
of the US Treasury On the other hand, those that invest in
bonds of companies with bad credit ratings so
general will be conditioned to greater risks.
Interest rate risk : the risk of decreasing the
quotation of bonds in the market when rates rise
of interest. Because of this, you can lose money with any
bond fund, including those that only invest in
Guaranteed bonds or Treasury bonds. The funds that
invest in longer-term bonds have the tendency to
present a higher interest rate risk.
Risk of early payment: the possibility of payment
a bonus in advance. For example, if interest rates
decrease, it is possible that a bond issuer decides to liquidate
(or "cancel") your debt and issue new bonds that pay a
lowest rate. When this happens, it is possible that the fund does not
can reinvest the income in an investment with an income
or equally high performance.
Stock funds
Although the value of a stock fund can increase
and decrease quickly (and drastically) in the short term,
Historically, stocks have performed better in the long term
than other types of investments, including corporate bonds,
government bonds and treasury investment certificates.
In general, "market risk" presents the greatest danger
potential for investors in stock funds. The
Share prices may fluctuate due to a wide range of
variety of reasons, such as the strength of the economy in
general or the demand for specific products or services.

Not all stock funds are the same. For example:
 The development funds focus on stocks that
possibly do not pay regular dividends, but have
the possibility of obtaining large capital gains.
 Revenue funds invest in stocks that pay
regular dividends.
• The index funds aim to achieve the same income as a
specific market index, such as the Index
composed of S & P 500 share prices, investing in
all the companies (or maybe in a representative sample
of them) included in an index.
 Sectoral funds can specialize in one sector
specific industry, such as the actions of the sectors
technological or consumer products.
You can buy shares in some mutual funds
communicating directly with the fund. Other actions of
Mutual funds are sold mainly through brokers,
banks, financial planners or insurance agents. Everyone
Mutual funds will redeem (re-buy) your
actions on any business day and should send you the payment in
the term of seven days.
The simplest way to determine the value of your
actions is calling the fund's toll-free telephone number
or visiting your website. The economic pages of
major newspapers sometimes publish NAVs of
several mutual funds. When you buy shares, pay the
Current NAV per share, plus any commission than the fund
imposed at the time of purchase, such as commissions of
sales or another type of similar charge for purchases. When you
sell your shares, the fund will pay the NAV, less any

commission that the fund imposes at the time of redemption,
such as deferred sales charge (or retroactive charge) or charge
for redemption. The NAV of a fund increases or decreases
daily according to the change in the value of your assets.
A "family of funds" is a group of mutual funds that share
administration and distribution systems. It is possible that each of
the funds of a family have different investment objectives and follow
different strategies.
Some funds offer exchange privileges within a family of
funds, allowing shareholders to transfer their assets from a fund
to another, as they change their investment objectives or their tolerance
towards the risks. Although some funds impose commissions for
exchanges, most funds typically do not. For
get more information about the exchange policies of a fund,
call the fund's toll-free number, visit their website,
or read the prospectus section on "information for shareholders".
Keep in mind that exchanges have tax consequences. Even
If the fund does not charge you for the transfer, you will be responsible for any
capital gain on the sale of their old shares, or, depending on
circumstances, you will be entitled to a capital loss. We will talk with
Care about taxes later
You can earn money from your investments in three ways:
1. Part of dividends: a fund may receive income in
form of dividends and interest on the securities in the portfolio.
Then the fund pays its shareholders, in dividends,
approximately all income (less expenses
declared) that has accrued.

2. D istribution of capital gains: it is possible that
increase the price of the securities held by a fund.
When a fund sells a value that has increased from
price, the fund has a capital gain. At the end of the year,
most funds distribute these capital gains
(minus any loss of capital) to its investors.
3. N AV increased: if you increase the price in the
market of the portfolio of a fund after the discount of
expenses and liabilities, then the value (NAV) of the fund increases
and your actions. The highest NAV reflects the highest value
of your investment.
Regarding dividend payments and distributions
of capital gains, usually the funds will give you a
option: the fund can send you a check or other form of payment,
or you can have your dividends reinvested in the fund
or distributions to buy more shares (often without having
to pay additional charges for sales of securities).

Factors that should be taken
Think about your long-term investment strategies and
about tolerance towards risks can help you decide
What is the type of fund that suits you best? But nevertheless,
should also take into account the impact that the commissions
and taxes will have on your investments with the passage of
All funds carry some level of risk. it's possible
you lose some or all of the money you invest (your
principal capital) because the values ​​conserved by a fund
increase or decrease in value. It is also possible that
Dividend or interest payments fluctuate as they change
market conditions.
Before investing, be sure to read the prospectus of a fund
and the reports to the shareholders to know the strategy of
fund investment and potential risks. It is possible that
Secondary instruments are financial instruments whose
returns come, at least in part, from the yields of
an asset, value or underlying index. Even small movements
market prices can drastically affect their value, sometimes in
unpredictable forms.
There are many types of secondary instruments with many uses
diverse The prospectus of a fund will indicate whether or not it uses instruments
and how you could use them. You can also call the fund and
Ask about how you use these instruments.

funds with higher rates of return take risks that
go beyond their comfort level and do not agree with
your financial goals
As with any business, the administration of funds
mutual costs, including transaction costs
of shareholders, investment advisory committees
and marketing and distribution expenses. The funds go through
these costs to investors through the imposition of
fees and expenses. It is important that you understand these
charges because they reduce your income.
Some funds impose "commissions to shareholders"
directly to investors, every time they buy
or sell shares. In addition, each fund has "expenses of
operation "regular, recurrent and applicable to the entire fund.
Typically, the funds pay their operating expenses of the
assets of the fund, which means that investors pay
indirectly these costs.
SEC rules require funds to disclose
what are your shareholder commissions and operating expenses
in a "commission table" located near the front page of the
prospect of the fund. The following lists will help you decipher
the commission table and to understand the different commissions
which can impose a fund:
Shareholder's fees
• G reat (charge) of sales on purchases: the amount that you
pay when you buy shares in a mutual fund. Known
also as a "charge in advance", this commission
it is typically received by the brokers who sell the shares
From the bottom. Advance charges reduce the amount of your
investment. For example, let's say you have $ 1,000 and
wants to invest them in a mutual fund with an upfront charge

of 5%. The $ 50 charge for selling securities that you
has to pay are discounted from the total and the remaining 950 dollars
will be invested in the fund. In accordance with the rules of the
FINRA, a charge in advance can not be higher than 8.5%
of your investment.
• C ommission of purchase: another type of commission that some
funds charge their shareholders when they buy shares.
Unlike sales charges in advance, a commission
purchase is paid to the fund (instead of the broker) and typically
imposed to defray some of the costs of the fund related
with the purchase.
• C argo (commission) for deferred sales: a commission that
You pay when you sell your shares. Also known
as "retroactive charge", this commission typically
they receive the brokers that sell the shares of the fund. The
most common type of retroactive sales charge is the "charge
contingent deferred sales "(also known as
"CDSC" or "CDSL", for its acronym in English). The amount of
This type of charge will depend on the time the investor
keep your shares and typically it is reduced to zero if
the investor keeps his shares for a while so
long enough
• C argo for redemption: another type of commission that some
funds charge their shareholders when they sell or redeem
Actions. Unlike a deferred sales charge, a
charge for redemption is paid to the fund (instead of the broker)
and typically it is used to defray the costs of the fund
related to the redemption of a shareholder.
• C ommission of change: a commission that some funds
impose on shareholders if they change (transfer) to another fund
within the same group of funds or "family of funds".
• C ommission of account: a commission that some funds impose
separately to investors in relation to maintenance

of your accounts. For example, some funds impose a commission
from account maintenance to accounts whose values ​​are lower
to certain amounts in dollars.
Annual operating expenses of the fund
• Administrative omissions: commissions paid from
the assets of the fund to the investment advisers of the fund for
the management of the investment portfolio; any other
administration fee payable to the investment adviser of the
fund or its affiliates; and administration fees payable
to the investment advisor that is not included in the category
"Other expenses" (of which we will talk later).
• C ommissions of distribution [and / or service] (Commissions
"12b-1"): commissions paid by the fund of fund assets
to cover the marketing and sale costs of fund shares
and, sometimes, to cover the costs of providing services
to the shareholders. The "distribution fees" include
commissions to remunerate brokers and other people who
sell shares of the fund; to pay for advertising and for the
printing, and the mailing of prospectuses to the new
investors; and by printing and mailing
sales brochures. The "Commissions for services to shareholders"
they are commissions that are paid to people to answer the
questions from investors and to provide information
to investors about their investments.
• Other expenses: expenses that are not included in the "Commissions of
administration "or in the" distribution or service commissions
(12b-1) ", as for example, any expense for services to
shareholders that have not been included in commissions 12b-1, expenses
of custody, legal and accounting expenses, expenses of agents of
transfers and other administrative expenses.
• Total annual operating expenses of the fund
("Expense ratio"): the line of the commission table

Some funds call themselves "without commissions." As he implies
the name, this means that the fund does not charge any commission
of sales. However, as we explained earlier, not all
Shareholder commissions are "sales commissions". It is possible that
a commission-free fund charges commissions other than fees
sales, such as purchase commissions, redemption charges, commissions
of change and account commissions. The funds without commission also
They will have operating expenses.
Some mutual funds that charge advance sales charges
they will charge lower charges for sales of securities in case of investments
more substantial. The investment levels required to obtain a charge
reduced by sales of securities are commonly referred to as "points
of balance ".
The SEC does not require that a fund offer balance points in the charge for
sales of fund values. However, if there are equilibrium points, the
fund should disclose them. In addition, a securities firm member of FINRA does not
You must sell shares of a fund for a sum that is "justly
below "the break-even point of the fund's sales charge
simply to earn a higher commission.
Each fund company establishes its own formula to calculate if a
investor is entitled to receive a break-even point. For that reason,
It is important to request information about balance points from your advisor
financial or the fund itself. You should ask how a fund
specific establishes eligibility for break-even discounts,
as well as what are the equilibrium points of the fund.
which represents the total of all annual operating expenses
from the bottom of a fund, expressed as a percentage of the
Average net assets of the fund. It is useful to keep in mind
the expense ratio as this can help you establish
comparisons between funds.
Be sure to examine the commission tables carefully
of any fund in which you plan to invest, including
the funds without commissions. Even small differences in

Commissions can become big differences in
income with the passage of time. For example, if you invested
$ 10,000 in a fund that produced 10% in revenue
annual fees before expenses and had annual operating expenses
1.5%, then, after the expiration of twenty (20) years,
you would have approximately $ 49,725. But nevertheless,
If the fund had only had expenses of 0.5%, then
you would have had $ 60,858 at the end, that is, a
difference of 18%.

Many mutual funds offer more than one class of shares.
For example, you may have seen a fund offer
"Class A" and "Class B" shares. Each class will invest in
the same "common fund" (or investment portfolio) of securities
and will have the same investment objectives and policies. Without
However, each class will have services to shareholders and / or agreements
of different distribution with different expenses and commissions.
As a consequence, it is very likely that each class has
different performance results.
A multi-class structure offers investors
the ability to select the commission structure and
Expenses that are most suitable for your investment objectives
(including the time they expect to remain invested in
the bottom). Here are some key features of the
most common mutual fund share classes offered to
Individual investors:
• Class A Auctions: Class A shares typically
impose a charge of sales in advance. They also tend
to have a lower commission 12b-1 and annual expenses more
lower than other kinds of mutual fund shares. Have
present that some mutual funds reduce the charge for
advanced as the size of your investment increases.
Page 22
If you plan to invest in Class A shares, be sure to
Request information about balance points.
• Class B Auctions: Class B shares typically do not
They have a sales charge in advance. On the other hand, it is possible
that impose a contingent deferred sales charge and a
commission 12b-1 (along with other annual expenses). The actions
of Class B could also be automatically converted to
a class with a lower 12b-1 commission if the investor
keep the actions for a sufficient time.
• Class C Auctions: Class C shares could have
a 12b-1 commission, other annual expenses and a sales charge,
either advanced or retroactive. But the sales charge
advanced or retroactive for Class C shares tends
to be less than that for Class A or Class shares
B, respectively. Unlike Class B shares,
Typically, Class C shares are not converted to another
class Class C shares tend to have annual expenses
greater than those of Class A or Class B shares.
When you buy and keep an individual action or bonus,
must pay every year income taxes on
the dividends or interest you receive. However, it will not have
to pay no tax on capital gains
until it really sells and unless it has profits.
Mutual funds are different. When you buy
and keep shares of mutual funds, you must tax
the rent on any ordinary dividend in the year in which
Receive or reinvest them. And, in addition to duty taxes on
any personal capital gain when you sell your shares,
you may also have to pay taxes all
years on the fund's capital gains. This is because
the law requires mutual funds to distribute the profits of
Page 23
INVESTOR MANUAL | twenty-one
If you invest in a tax-exempt fund (such as, for example,
a municipal bond fund), some or all of your dividends will be
exempt from federal (and sometimes state and municipal) taxes
about the rent However, you will owe taxes on any
capital gain
capital to shareholders if they sell securities with a profit that
it can not be counteracted by a loss.
Keep in mind that if you receive a distribution of
capital gains, most likely you owe taxes,
even if the fund has had a negative performance during
the year from the time you bought your shares.
For this reason, you should call the fund to find out when
make distributions so you do not have to pay more
taxes of which they correspond. Some of the funds
They post this information on their Internet sites.
SEC rules require mutual funds to disclose
in your prospects after-tax income. When calculating
Income after taxes, mutual funds should
use standardized formulas similar to those used
to calculate the average annual total income before
taxes. You will find the after-tax income of
a fund in the "Risk / Income Summary" section of the
leaflet. When comparing funds, be sure to take
Count the taxes.

Page 24
How to Avoid Dangers More
If you decide to invest in mutual funds, be sure to get the
as much information as possible about the fund before investing.
And do not make assumptions about the integrity of the fund
based solely on your performance in the past or on your
first name.
When you buy shares of a mutual fund, the fund must
Provide a prospect. However, you can (and should)
request and read the prospectus of a fund before investing. The
The prospectus is the sales document of the fund and contains
valuable information, such as, for example, the objectives or goals
of the fund's investment, the main strategies to achieve
these objectives, the main risks that are incurred when investing
In the background, fees and expenses and past performance.
The prospectus also identifies the managers and advisors of the
background and describes how they can be bought and redeemed
the actions of the fund.
While they may seem intimidating at first, the
mutual fund prospects contain a hidden treasure of
valuable information. The SEC requires that funds include in their
prospects specific categories of information and presenting
key data (such as commissions and past performance) in a
standard format so that investors can compare
the different funds more easily.
Below, some of the items you will find in the
Prospects of mutual funds:
Page 25
• Issuance date: the prospectus date should appear in
The cover. Mutual funds must update their prospects to
less once a year, so always check to make sure
that you have the updated version.
• Bar graph and risk / income table: Near the
front of the prospectus, just after the narrative description of the
background about your objectives or goals, strategies and risks, you will find
a bar graph that indicates the total annual income of the
fund for each of the last ten (10) years (or by the
duration of the fund, if it is less than ten years old).
All funds that have annual income for at least
One calendar year should include this chart.
Except in certain circumstances, the funds also
They must include a table indicating the income (both before
as for after taxes) in the most recent periods of
one, five and ten years. The table will also include the income of
an adequate broad-based index for the purposes of comparison.
Here we indicate what this table would include:
FIVE (5)
TEN (10)
Income before taxes
Income after
of taxes on
-% t
Income after
of taxes on
distributions and sale of
fund shares
(does not reflect discounts
by commissions, expenses or

Page 26
Note: Be sure to read the footnotes or explanations
attached to make sure you understand perfectly the
data offered by the background in the bar chart and in the table.
Also, keep in mind that the bar graph and the table for
a multi-class fund (offering more than one kind of
fund shares in the prospectus) will typically show the
performance and income data for a single class.
• Commission fee: after the bar graph and the
annual income table, you will find a table that describes
the commissions and expenses of the fund. These include
shareholder commissions and annual operating expenses
of the background described in detail above. The table of
commissions includes an example that will help you compare
costs between the different funds, showing the costs
related to the hypothetical $ 10,000 investment
during periods of one (1), three (3), five (5) and ten (10) years.
• Interest-bearing financial items: this section, which
general appears towards the end of the prospectus, contains data
verified with respect to the fund's financial performance
for each of the last five (5) years. Here you will find
net asset values ​​(both for the beginning and
by the end of each period), total and various income
coefficients, including the cost ratio to the average
net assets, the ratio of net income to the average
net assets and the rate of portfolio movement.
Some mutual funds also provide a "profile" to the
investors, which summarizes key information contained in
the prospectus of the fund, such as, for example, the objectives of
investment of the fund, the main investment strategies,
Main risks, performance, fees and expenses, income
after taxes, identity of the investment adviser of the
fund, investment requirements and other information.
Page 27
Declaration of additional information ("SAI", for its acronym in English)
Also known as "Part B" of the declaration of
registration, the SAI explains the operations of the fund with
detail that the prospectus, including the financial statements and
details about the history of the fund; the fund's policies on
loans and concentration; the identity of the officials,
directors and people who control the fund; the advice of
investment and other services; brokerage commissions; the
tax matters; and performance, such as information about
revenues and average annual total income. The fund should send you
a UPS if requested. The back cover of the fund's prospectus
It should contain information on how to obtain the UPS.
Reports to shareholders
A mutual fund must also supply the shareholders
annual and semi-annual reports within sixty (60) days
following the end of the fund's fiscal year and sixty
(60) days after the middle fiscal year of the fund. These reports
contain a variety of updated financial information,
a list of the securities in the fund's portfolio and other information.
The information in the reports to shareholders will be up to date
on the date of the specific report (which is the last day of the year
fiscal fund for the annual report and the last day of the middle
fiscal year of the fund for the semi-annual report).
Investors can obtain all these documents from
The following forms:
Calling or writing to the fund (all mutual funds
they have toll-free numbers);
Visiting the website of the fund on the Internet;
Communicating with a broker that sells the shares
From the bottom;

Page 28
Searching the EDGAR database of the SEC at http: //
www.sec.gov/edgar.shtml and downloading for free the
documents; or
Calling the Education and Assistance Office by telephone
for investors of the SEC at (202) 551-8090; by fax, at
(202) 772-9295; or by email, at publicinfo @ sec.
gov. Please keep in mind that we charge 24 cents of
dollar for each page we photocopy.
The performance of a fund in the past is not as important as
You could think. The advertisements, the classifications and the
qualifications often emphasize how well he has performed
a background in the past. However, studies show that the
future is often different. The "number one" fund of this
year can easily become the bottom below the
average next year.
Be sure to find out for how long the fund has existed.
Newly created or small funds sometimes have a
excellent trajectory of short-term performance. Because
it is possible that these funds only invest in a small
number of actions, a few successful actions can have a
great impact on your performance. However, as these
funds grow and increase the number of shares they own,
each action has a minor impact on its performance. it's possible
make it more difficult to maintain the initial results.
While performance in the past does not necessarily forecast
future income, it can tell you how volatile (or stable)
It has been a background in a period of time. In general, how much
the more volatile a fund, the greater the risk that runs in the
investment. If you will need your money to meet a goal
short-term economic, you probably can not afford the
Page 29
luxury of investing in a fund with a history of volatility because
will not have enough time to cope with any decline
that there is in the stock market.
Do not assume that a fund whose name is "Fondo
of XYZ shares, "only invests in shares, or that the" Fund
High Performance Martian "only invests in
securities of companies with operations center on the planet
Mars. The SEC requires that any mutual fund with a
name that suggests that you focus on a specific type of
investments must invest at least 80% of its assets
in the type of investment referred to in its name. With everything and
that, the funds can still invest up to a fifth of their
assets in other types of securities, including the values ​​that you
could be considered too risky or, perhaps, not
aggressive enough
Page 30
Now many banks sell mutual funds, some of the
which bear the name of the bank. However, the funds
mutuals sold by banks, including market funds
monetary, are not bank deposits. Consequently, they are not
federally insured by the Federal Insurance Corporation
of Deposits (FDIC, for its acronym in English).
Do not confuse a "money market fund" with a "money market account"
money market deposit ". Although the names are similar, they are
two completely different things:
• A money market fund is a type of mutual fund. No this
Guaranteed or insured by the FDIC. When you buy shares
In a money market fund, you should receive a prospectus.
• A money market deposit account is a deposit
banking. Yes, it is guaranteed and insured by the FDIC. When you deposit
money in a money market deposit account, you should receive
a form on the Act of truthfulness in the savings information.

Page 31
If you have problems
If you have problems with your mutual fund, you can send us your
complaint using our online complaint form
at www.sec.gov/complaint.shtml. also can
communicate with us by postal mail, writing to:
US Securities and Exchange Commission
Office of Investor Education and Advocacy
100 F Street, NE
Washington, DC 20549-0213
Toll-free line: (800) 732-0330
Website: www.investor.gov
For more information on how to invest
sensibly and avoid scams, we suggest you consult the section
"Investor Information" for investors
our website on www.sec.gov/investor.shtml.
Page 32
Glossary of Key Terms
Related Mutual Funds
Commissions 12b-1: commissions paid by the fund of the
Fund assets to cover marketing and sales costs
of fund shares and, sometimes, to cover costs
of rendering services to shareholders. The "commissions of
distribution "include commissions to remunerate brokers
and to other people who sell shares of the fund; to pay the
advertising, printing and mailing of leaflets to
new investors; and for printing and mailing
of sales brochures. The "Commissions for services to shareholders"
they are commissions that are paid to people to answer the
questions from investors and to provide information
to investors about their investments.
Account commission: a commission that some funds
impose investors separately for maintenance
of your accounts. For example, accounts that are below
a certain amount in dollars, they may have to
pay an account commission.
Retroactive sales charge: a sales charge (also
known as "deferred sales charge") paid by the
investors when they redeem (or sell) fund shares
mutual funds, usually used by the fund to remunerate
the runners.
Classes: different types of shares issued by a single fund, a
often referred to as Class A shares, Class shares
B and so on. Each class invests in the same "fund
common "(or investment portfolio) of securities and has the same
investment objectives and policies. However, each class has
services to shareholders and / or different distribution agreements
Page 33
with different expenses and commissions and, consequently, results
of different performance.
Limited funds: a type of investment company that does not
continuously offers its shares for sale, but, by the
otherwise, it sells a fixed amount of shares at a time (in the offer
initial public) that, then, typically trade in a market
secondary, such as, for example, the New York Stock Exchange
or the Nasdaq Stock Market. It is legally known as a
"Limited capital company".
Contingent deferred sales charge: a type of charge for
retroactive sales, whose amount depends on how long you had
your actions the investor. For example, a sales charge
contingent deferred could be (X)% if an investor keeps
your shares for one (1) year, (X-1)% after two years and so
successively, until the charge is reduced to zero and disappears
Conversion: a feature offered by some funds and that
allows investors to automatically switch from one
class to another (typically with lower annual expenses) after
a set period of time. The prospect or profile of the fund
will stipulate if ever a class becomes another class.
Deferred sales charge: see "retroactive sales charge"
Distribution fees: commissions paid from
the assets of the fund to cover marketing and selling expenses
fund actions, including advertising costs; remuneration
to brokers and other persons who sell shares of the fund;
and payments for printing and mailing of prospectuses to the
new investors and sales brochures to investors
potential They are sometimes referred to as "12b-1 commissions."

Page 34
Exchange commission: a commission that some funds
impose on shareholders if they change (transfer) to another fund
within the same group of funds.
Funds quoted on the stock exchange (ETF, for its acronym in English):
a type of investment company (be it a capital company
unlimited or units in investment companies [ITU, for
its acronym in English]), whose objective is to achieve the same performance
than a specific market index. The ETFs differ from the
companies with unlimited capital and traditional UITs because,
in accordance with the SEC's exemption orders, the
shares issued by ETFs are listed on a secondary market
and they are only redeemable from the bottom itself in very large packages
(packages of 50,000 shares, for example).
Coefficient of expenses: the total annual operating expenses
of the fund (including administrative expenses, commissions
of distribution [12b-1] and other expenses) expressed as a
average percentage of net assets.
Advance charges: an advance sales charge that
paid by investors when they buy shares of the fund, for
the general used by the fund to remunerate brokers.
A charge in advance reduces the amount available for
buy shares of the fund.
Index fund: describes a type of mutual fund or Unit
in an investment company (UIT), whose
Investment objective is typically to achieve the same income as
a specific market index, such as the Index
composed of S & P 500 stock prices, the Russell Index
2000 or the Wilshire 5000 Total Market Index.
Investment advisor: usually, a person or entity
who receives remuneration for providing individualized advice
Page 35
to a specific person about investments in stocks, bonds
or mutual funds. Some investment advisers also
they manage portfolios of securities, including mutual funds.
Investor company: a company (corporation,
business association, partnership of persons or company
limited liability company) that issues securities and participates
Primarily in the securities investment business. The three
fundamental types of investor companies are the funds
mutual funds, limited share mutual funds and units
in investment companies.
Charge: see "Sales expense".
Administrative charge: commissions that are paid from the assets
from the fund to the fund's investment advisors or their affiliates
for the management of the fund's portfolio; any other
Administration fee payable to the investment adviser
of the fund or its affiliates; and any administration commission
payable to the investment advisor that is not included in the category
"Other expenses". An administrative charge for a fund appears
as a category in the Table of commissions under the heading
"Annual expenses of operation of the fund".
Market index: a measure of the performance of a "basket"
specific to actions that is considered as a representative of a
market or a particular sector of the stock market or the
US economy UU For example, the Dow Industrial Average
Jones (DJIA, for its acronym in English) is an index of 30 shares of
first category (blue chip) of industrial companies of the EE.
UU (excluding transport and utility companies).
Mutual fund: the popular name that is used to designate
an investment company with unlimited shares. Like
other types of investment companies, mutual funds bring together

Page 36
money from many investors and invest the money in shares,
bonds, money market instruments in the short term or in
other values. Mutual funds issue redeemable shares that
investors buy directly from the fund (or through
a broker for the fund) instead of buying them from investors
in a secondary market.
Net active value (NAV): the value
of the assets of the fund minus its liabilities. The rules of
SEC require funds to calculate the NAV at least one
once a day. To calculate NAV per share, simply subtract
the liability to the asset of the fund and then divide the result by the
number of shares outstanding.
Fund without commission: a fund that does not charge any type of
charge for sales of securities. However, not all types of
Shareholder commissions are a "charge for sales of securities"
and it is possible for a fund without commissions to charge commissions that
they are not charges for sales of securities. The funds without commissions
they also charge operating expenses.
Unlimited capital company: the legal name of a fund
mutual. A company with unlimited capital is a type of company
Operating expenses: the costs incurred by a fund
in relation to the functioning of the fund, including
administration commissions, distribution commissions
(12b-1) and other expenses.
Portfolio: the set of shares, bonds or other securities and assets
of an individual or entity.
Page 37
Profile: summarizes key information about costs, objectives of
investment, risks and performance of a mutual fund. While each
mutual fund has a prospectus, not all mutual funds
They have a profile.
Prospectus: describes the mutual fund to investors
potential All mutual funds have a prospect. The
prospectus contains information about costs, objectives
of investment, risks and performance of the mutual fund.
You can get a prospectus from the fund company
mutual (through your website or by telephone or by
mail). Your finance professional or broker can also
provide you a copy.
Purchase commission: the commission charged by some funds
to a shareholder when investors buy shares of
Mutual funds. It is not the same as a charge in advance (and
it could be charged in addition to this one).
Redemption fee: a commission that some funds
They charge the shareholder when the investors redeem (or sell)
Mutual fund shares. The charges for redemption (which
must be paid to the fund) are not the same as a sales charge
retroactive (which could be charged in addition to this one) that typically
A broker is paid. In general, the SEC restricts charges
by redemption at 2%.
Sales expense (or charge): the amount paid by investors
when they buy (charge in advance) or redeem (charge
retroactive) shares in a mutual fund, similar to a commission.
SEC regulations do not limit the amount of sales charges for
values ​​that a fund can charge, but the rules of FINRA
stipulate that the charges for sales of securities of a mutual fund
they can not exceed 8.5% and must be even lower,
depending on the other commissions and charges that are imposed.

Page 38
Commissions for services to shareholders: commissions paid
to people to answer the questions of the investors and
to provide information to investors about their
investments. See also "commissions 12b-1".
Declaration of additional information (SAI, for its
Acronyms in English): provides information about a fund of
unlimited investments or a limited investment fund,
that it is not necessary for investors to have to take a
decision based on investments, but what do you think?
useful to some investors. While the funds are not required
to supply the UPS to investors, they must supply them
free if they request it. Also known as "Part
B "of the declaration of inscription of the fund.
Total operating expenses of the fund: the total of
the annual operating expenses of the fund of a fund, expressed
as a percentage of the average net assets of the fund.
You will find the total in the fund's commission table in the
Unit in investment companies (UIT, for its initials
in English): a type of investment company that typically
makes a "public offer" only once of just one amount
specific and fixed units. A ITU will conclude and dissolve in
the date established at the time of the creation of the ITU
(although it is possible that some end more than fifty years
after having been created). ITU does not actively negotiate
your investment portfolios.

Leer mas