Mutual Funds

Understanding Investment Risk

Investing in mutual funds involves various risks that investors should consider. At VEO Investment, we emphasize the importance of understanding these risks to make informed decisions. Market risk can cause fund values to fluctuate, while bond funds face credit risk from potential issuer defaults and interest rate risk from rising rates. International funds also encounter currency and geopolitical risks. By understanding these risks, VEO Investment assists clients in building diversified portfolios that align with their risk tolerance and financial goals.

The Importance of Mutual Fund Investment

Mutual funds are a vital component of a well-rounded investment strategy, offering several key benefits. At VEO Investment, we recognize their importance in achieving financial goals.

We guide clients in selecting mutual funds that align with their risk tolerance, investment objectives, and financial goals, ensuring a strategic and effective approach to building wealth.

Key Terms and Our Definition of Mutual Funds Investing at VEO Investment

What are Mutual Funds?

Mutual funds are investment portfolios funded by investors who purchase shares in the fund, gaining part-ownership of the underlying assets. The fund’s performance reflects the value of these collective assets; if the assets increase in value, so do the fund shares, and vice versa. A mutual fund manager oversees the portfolio, allocating money across various sectors and industries based on the fund’s strategy.

How Are Earnings Calculated for Mutual Funds?

Investors typically earn returns from mutual funds through three primary channels:

• Dividend/Interest Income: Mutual funds distribute dividends from stocks and interest from bonds held in their portfolios. Investors have the option to receive these distributions as cash or reinvest them to buy more shares in the fund.
• Portfolio Distributions: When a mutual fund sells securities that have appreciated in value, it realizes capital gains. These gains are often passed on to investors.
• Capital Gains Distribution: Investors can also profit when the market price of mutual fund shares rises, allowing them to sell their shares at a higher price.

Types of Mutual Funds

Here are the key types of mutual funds:

• Stock Funds: These funds primarily invest in equities or stocks. They can focus on different company sizes (small, mid, large) or investment styles (growth, value, blend).
• Bond Funds: These funds invest in fixed-income securities like government bonds, corporate bonds, and other debt instruments.
• Index Mutual Funds: These funds replicate the performance of a specific market index (e.g., S&P 500) with lower management fees.
• Balanced Funds: These funds invest across different asset classes such as stocks, bonds, and cash equivalents to diversify risk.
• Money Market Mutual Funds: These funds invest in short-term, low-risk debt securities like Treasury bills.
• Income Funds: These funds aim to distribute regular income by investing in high-quality bonds and dividend-paying stocks.
• International and Regional Funds: These funds invest outside the investor’s home country or focus on specific regions.
• Sector and Theme Funds: These funds concentrate on specific industries like technology, healthcare, or finance.
• Socially Responsible Funds: These funds follow environmental, social, and governance (ESG) criteria when selecting investments.

VEO Investment is Leading the Way in Mutual Fund Investments

As mutual funds gain greater importance, we continuously improve and innovate our platform. By leveraging our technology, scale, and trustee model, our aim is to elevate client service capabilities both now and in the years ahead.

Our Approaches to Mutual Funds

At VEO Investment, mutual fund approaches encompass specific plans and tactics employed by our fund managers to achieve investment objectives. These approaches include:

• Pursuing Exceptional Investment Opportunities: We evaluate numerous opportunities each year and select only those meeting our stringent criteria.
• Providing a Comprehensive Investment Perspective: We offer clients a holistic view of their entire investment portfolio.
• Ensuring Transparency: We use advanced technology and data tracking to maintain transparency throughout the investment process.
• Aligning with Client Goals: We prioritize aligning our strategies with the unique goals and values of our clients.

Exploring Mutual Fund Strategies at VEO Investment

Mutual funds employ various investment strategies to achieve their objectives, catering to different investor preferences and market conditions. Here are some common mutual fund investment strategies we apply at VEO Investment:

• Active Management: Our fund managers actively trade securities to exceed benchmark indices or achieve specific investment goals.
• Passive Management (Indexing): We replicate the performance of major market indices to minimize trading activity and costs.
• Asset Allocation: We strategically allocate investments across different asset classes to balance risk and return.
• Sector Rotation: We adjust investments across various sectors based on economic trends.
• Style-Based Investing: We focus on specific investment styles such as growth, value, or a blend of both.
• Income-Oriented Strategies: We generate consistent income for investors through dividend-paying stocks and bonds.
• ESG Investing: We integrate environmental, social, and governance factors into our investment decisions.
• Dynamic Asset Allocation: We dynamically adjust asset allocations based on changing market conditions.

These strategies allow VEO Investment to tailor our mutual fund offerings to meet the diverse needs and preferences of our investors, aiming to achieve optimal returns while prudently managing risks in the market environment.