A mutual fund family offers more than one mutual fund. The fund family shares the same distributor (the company which handles selling and buy shares of the fund in transactions with investors), and investment advisor (which is usually a corporate cousin of the distributor).
Each fund in a family may have different investment objectives and follow different strategies Examples of mutual fund families include: Vanguard, Fidelity, Janus and American funds. Each company may offer several different fund families.
One advantage to investing in mutual fund families is that multiple funds, often with different objectives, are available. They allow greater flexibility in reallocating funds and consolidated paperwork. In other words, it’s easy to shift investments around if your personal objectives change or the market changes.
Some funds offer exchange privileges within a family of funds, allowing shareholders to transfer their holdings from one fund to another as their investment goals or tolerance for risk change. While some funds impose fees for exchanges, most funds typically do not.
To learn more about a fund's exchange policies, call the fund's toll-free number, visit its website, or read the "shareholder information" section of the prospectus.
You will still need to do your homework when selecting mutual fund families. There should be diversification with the fund, and include stocks, bond and cash or fixed investments as well as the ten year return.
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