Mutual Funds / UITs Investors need advice and experience to manage all of today’s investment choices. We help our clients reach their financial goals through careful, disciplined, and personalized investment management, with a breadth of investment products to match. Mutual Funds Northland Securities offers a wide array of mutual funds from across the universe of investment companies. A Mutual Fund is a pool of investment dollars collected from many investors for the purpose of investing in securities, such as stocks, bonds, money market instruments, and similar assets. They are operated by money managers who invest the fund’s capital and attempt to produce capital gains and income for the fund’s investors. A mutual fund’s portfolio is structured and maintained to match the investment objectives stated in its prospectus. Mutual funds meet a broad range of investment goals with portfolios ranging from conservative to more speculative investments. A Northland Financial Advisor can help you choose from among these options to create a balanced portfolio. Please contact us to discuss which fund and class types may be best for you and your goals. Open-End Funds Open-end funds are what most people consider as a mutual fund. They don’t have a limit as to how many shares they can issue. When an investor purchases shares in a mutual fund, more shares are created, and when somebody sells his or her shares the shares are taken out of circulation. If a large amount of shares are sold (called a redemption), the fund may have to sell some of its investments in order to pay the investor. Open-end funds don’t trade on the open market; at the end of each trading day, the funds reprice based on the amount of shares bought and sold. Their price is based on the total value of the fund — the net asset value (NAV). Closed-End Funds A closed-end fund functions much more like an exchange-traded fund than a mutual fund. They are launched through an IPO in order to raise money and then trade in the open market just like a stock or an ETF. They only issue a set amount of shares and, although their value is also based on the NAV, the actual price of the fund is affected by supply and demand, allowing it to trade at prices above or below its real value. A key fact about closed-end funds: Nearly 70% of all of these products use leverage as a way to produce more gains. Using borrowed money to invest may produce larger returns, but it could also put the fund under intense pressure during market fluctuations and industry changes. Investors should always compare and learn about individual products, even within a single asset class; some open-end funds may be more risky than some closed-end funds. Each product is unique. Unit Investment Trusts (UITs) Unit Investment Trusts are professionally-selected smaller portfolios of stocks or bonds designated to meet stated investment objectives. The investor chooses a UIT based on the objective of the trust and securities in the portfolio. Investors Who May Want to Consider Investing in UITs Buy-hold strategies – portfolio will not be changed by constant investment activity Help to avoid short-term capital gains while also deferring long-term capital gains Most equity UITs have a holding period between 12 months and five years Most fixed income UITs may be created with a five- to 30-year structure Contact a Northland Wealth Management specialist to learn more. The presentation of this material is neither an offer to sell nor a solicitation of an offer to purchase any investment or security. These investments are offered by prospectus, which provides detailed information, including investment specifics, fees, and expenses. This material must be read in conjunction with a prospectus in order to fully understand all the implications and risks of an investment. Individual suitability should be determined before purchasing any investment. Some specialized investments are not suitable for all investors; an investment profile will help to determine appropriate portfolio options. A diversified portfolio is no guarantee of safety of principal and investments are subject to fluctuation and possible loss of principal. Mutual Funds are offered by prospectus, which provides information including investments, fees, and expenses.
