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What Are Mutual Fund Families?

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  • Written By: Geri Terzo
  • Edited By: PJP Schroeder
  • Last Modified Date: 09 September 2018
  • Copyright Protected:
    2003-2018
    Conjecture Corporation
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There are multiple different types of securities to invest in across the financial markets. Investment firms may specialize in one particular asset class, such as bonds, which are a form of fixed income, or a fund may be designed to invest in different securities and asset classes as opportunities arise. Mutual fund families are the investment portfolios that are branded under the same financial adviser name. If there is a third-party firm that handles the distribution of assets and profits to clients, it is included in the family of funds. Investment firms may have between one and thousands of individual mutual funds, each with its own composition, strategy, and investment advisory team.

A mutual fund adheres to a certain strategy that is outlined in a formal document, such as a prospectus. In addition to a fee outline, investors gain a sense of the types of securities that are sought after in a given mutual fund. Also, the names of the professionals making the investment decisions as well as performance history and expectations are disclosed. Investors large and small are able to discern the mutual funds that will meet investment needs because of these details. One individual mutual fund will typically not be enough, and this is why investment firms introduce mutual fund families.

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Given the variety of different asset classes available, investment firms offer mutual fund families to give investors the widest variety of options. Mutual funds might invest in stocks, bonds, or commodities, for instance. In each asset class category, there could be further breakdowns to include only energy stocks or a combination of both stocks and bonds in a balanced fund. Although each individual mutual fund has a different composition, it is branded and run by the same management firm. Investors may select mutual funds run by different investment firms by selecting individual portfolios from the different mutual fund families.

Some of the largest investment firms in the world specialize in one particular asset class, such as bonds, and mutual fund families are created based on these securities. Funds might offer exposure to domestic, international, or emerging market bonds, for instance. Certain funds might only invest in bonds with a short-term maturity, while others might prefer longer-term securities. Individual portfolios in a mutual fund family might invest in government bonds or corporate bonds, either investment grade or risky debt. All of these options can be available at the same investment firm and under the same mutual fund family umbrella.

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