A mutual fund is a pooled investment vehicle that provides access to a variety of underlying assets, including stocks, bonds and other securities. Mutual fund investors own shares of the fund, not the underlying securities. Mutual funds are priced once daily at market close based on the fund's net asset value (NAV).
Mutual funds provide convenient access to a broad range of securities that investors would otherwise need to purchase individually. A mutual fund’s large number of holdings provide scale and diversification—reducing the effect of any one security’s performance. Funds can also fit seamlessly into retirement accounts like 401(k)s and IRAs.
Active mutual funds are managed by experienced investment professionals required to be registered as investment advisors under the Investment Advisers Act of 1940. Managers use fundamental research, quantitative research, or both to select securities. But not all mutual funds are actively managed. Passively-managed funds-also known as index funds-aim to track a market benchmark.
Mutual funds provide both liquidity and transparency. All or a portion of an investor’s shares can be redeemed daily at net asset value, and there’s no guesswork involved. Mutual funds must disclose their portfolio holdings on a quarterly basis, and the fund company handles all recordkeeping, ensuring that shareholders receive regular reports showing purchases and redemptions.
Mutual fund shares are purchased at a market-determined public offering price and redeemed at net asset value.
When purchasing shares, investors may incur an up-front sales charge known as a front-end load. Funds with front-end loads are often sold as Class A shares.
Alternatively, some funds charge a back-end load at the time of redemption—sometimes referred to as a contingent deferred sales charge. These funds are often sold as Class B shares. Funds may offer additional share classes, as well.
For investors seeking transparency, liquidity and diversification options, mutual funds remain a cornerstone of long-term investing.
AllianceBernstein is a global investment manager with a singular focus on delivering superior outcomes for clients through active management and differentiated research. Through innovation, technology, and deep client partnerships, AB provides flexible solutions and actionable insights to help investors navigate complex markets confidently.
AB mutual funds are actively managed and powered by global research. Our investment process aims for consistency across market cycles by combining rigorous research, thoughtful portfolio construction and disciplined risk management.
Investors should consider the investment objectives, risks, charges and expenses of the Fund/Portfolio carefully before investing. For copies of our prospectus or summary prospectus, which contain this and other information, visit our Literature Center or contact your AB representative. Please read the prospectus and/or summary prospectus carefully before investing.
A Word About Risk: Because each fund pursues its own unique investment objectives, each fund has its own set of risks, which are fully discussed in its prospectus. In order to achieve their investment objectives, some funds may at times use certain types of investment derivatives, such as options, futures, forwards and swaps. These instruments involve risks different from, and in certain cases greater than, the risks presented by more traditional investments. For funds that can invest in foreign securities, which may include emerging-market securities, risks may be magnified due to changes in foreign exchange rates and the possibility of substantial volatility due to political and economic uncertainties in foreign countries. Portfolios that hold a smaller number of securities may be more volatile than more diversified portfolios. Funds that invest in small-cap and mid-cap stocks are often more volatile than funds that invest in large-cap stocks; smaller companies generally face higher risks due to their limited product lines, markets and financial resources. Funds that invest in real estate are subject to a variety of factors affecting the real estate market, such as economic conditions, mortgage rates and availability, which can cause the value of such investments to decline. Funds that invest in fixed-income securities are subject to decreasing bond prices as interest rates rise and increasing bond prices as interest rates fall. The values of mortgage-related securities and asset-backed securities are particularly sensitive to changes in interest rates due to prepayment risk. In addition, a bond’s credit rating reflects the issuer’s ability to make timely payments of interest or principal; the lower the rating, the higher the risk of default. If the issuer’s financial strength deteriorates, the issuer’s rating may be lowered and the bond’s value may decline. Funds that invest in debt securities issued by state or local governments may be subject to special political, legal, economic and market factors that can have a significant effect on the portfolios’ yield or value.
There can be no assurance that any investment vehicle or strategy will achieve its investment objectives. The value of an investment can go down as well as up and investors may not get back the full amount they invested. Capital is at risk.