Mutual Funds

Numerous Ways to Diversify Your Portfolio via Thousands of Mutual Fund Offerings

Mutual funds can meet a wide variety of investment needs. If you're seeking professional management, diversification and convenience, talk to your Financial Advisor about whether mutual funds can complement your portfolio.

Why Choose Mutual Funds?

A mutual fund combines the money of a large group of investors into a fund to achieve a specific objective over time. A portfolio manager actively manages the portfolio in accordance with the investment objectives of the fund.

Mutual funds can utilize their buying power to achieve greater portfolio diversity than you would typically attain investing on your own. Since a mutual fund's portfolio can hold a range of securities, the fund's success isn't dependent on how one or two holdings perform.

Types of Mutual Funds

There are a variety of mutual fund types, but most fall into one of three categories in terms of their investment objectives:

  • Money market funds seek safety of principal by investing in high quality, short term securities such as bank certificates of deposit (CDs), US Treasury bills and commercial paper. They generally aim to provide a steady stream of predictable interest income but typically provide lower yields than other types of investments.
  • Income funds invest in either corporate, government or municipal debt securities. A debt security is an obligation that typically pays interest on a regular basis, and it offers an investment for those who desire periodic income payments. Income funds seek higher yields than money market funds but also come with greater risks.
  • Growth funds invest primarily in the common stock of public companies. These types of funds are more volatile than money market or income funds, and may be best suited to less conservative investors seeking more aggressive returns.

Access a Variety of Funds and Resources

You and your Financial Advisor can choose from more than 4,000 different funds, offered by more than 300 fund companies.

Important Information About Mutual Funds

We also invite you to visit the websites of the U.S. Securities and Exchange Commission ( and the Financial Industry Regulatory Authority ( for additional educational information about mutual funds.

Risk Considerations

There is no assurance that a mutual fund will achieve its investment objective. Funds are subject to market risk, which is the possibility that the market value of fund shares may be more or less than what an investor paid for them. Accordingly investors can lose money investing in a mutual fund.

An investment in a money market fund is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although money market funds seek to preserve the value of an investment at $1.00 per share, there is no assurance that will occur, and it is possible to lose money if the fund value per share falls.

It is important to consider a mutual fund's investment objectives, risks, charges and expenses carefully before investing. The prospectus contains this and other information about the fund. A copy of the prospectus may be obtained from a Morgan Stanley Financial Advisor. Please read the prospectus carefully before investing.

560420 10/2012