Mutual funds, organized as CORPORATIONs and regulated by the SECURITIES AND EXCHANGE COMMISSION, are major FINANCIAL INTERMEDIARIES in today’s world. They accept funds from savers by selling them shares and then use the proceeds to invest in various financial securities ranging from short-term debt instruments to long-term BONDS and stocks. In order to meet the needs and desires of the various savers, each mutual fund specializes in investing in a particular type or a unique mix of securities. Generally there are income funds, growth funds, and mutual funds made up of a mix of income and growth funds. Moneymarket mutual funds invest only in short-term securities and operate like interest-bearing checking accounts for the savers. Income funds are mutual funds investing in lower-risk securities, usually bonds. They attract savers who are looking for stability and regular INCOME from their INVESTMENTs, rather than growth or higher rates of return. Growth funds invest in higher-risk securities, such as stocks. These mutual funds attract savers who are less RISK averse, willing to assume greater risk for the potential of higher returns from their investments. By pooling the funds of many savers, a mutual fund realizes ECONOMIES OF SCALE in the purchasing, selling, and management of its securities portfolio. Such portfolios also offer the benefits of diversification for the savers. Perhaps the greatest benefit offered by mutual funds is that they allow small investors to enjoy the same rates of return normally available only to larger investors. The saver who invests $5,000 in a mutual fund receives the same percentage return as a saver with $5 million in the fund. A small investment in a mutual fund can offer a yield much higher than if that same amount were invested in a certificate of deposit, for example. A mutual fund may be organized as an open-ended fund or a closed-end fund. In the more common open-ended fund, shares may be redeemed at any time at a price determined by the ASSET value of the total fund. A closed-end fund is comprised of a fixed number of nonredeemable shares which, after their initial offering, are traded like COMMON STOCK. Closed-end shares are less liquid than oneended shares and are therefore less popular with investors. Originally mutual funds were load funds, in which a sales commission is charged and paid when the shares are purchased. Today, however, most mutual funds are no-load funds, in which shares are sold directly and no commission is charged. The administrators of mutual funds are called managers. They earn income by charging management fees ranging from .5 percent to 2 percent of the asset value of the total fund. Most SHAREHOLDERS consider management fees of 1.5 percent or greater to be relatively excessive, and as a result, the more common management fees are less than 1 percent.