The contents of this presentation are confidential. Copyright © 2019 Workiva Inc.

Investing in Mutual Funds

Arthy KumarMarch 26, 2019

Arthy KumarDirector of Product Marketing, Workiva

• Oversees the investments industry• Works exclusively with financial services companies• Prior experience: financial planning, investment

portfolio analysis, relationship management, andpeople management

• Certified financial planner (CFP) and a charteredfinancial consultant (ChFC)

Certificates are sent via email 1 week after event

Also available for downloadon Wdesk University

Questions? Contacttraining@workiva.com

Claiming Your CE

A minimum of 50-minutes of participation is required for CE

After this webinar, you will be able to

• Identify definitions and characteristics relating to investing in mutual funds

• Consider and investigate mutual fund options

• Explain where mutual funds can be used to strengthen or build a portfolio

Key Takeaways

What is a mutual fund?

Mutual funds are assets from various investors that are pooled togetherand invested by the company issuing the mutual fund

Why invest in mutual funds?

• Portfolio diversification

• Affordability

• Professional management

• High liquidity

What is your goal?

• Growth

• Capital Preservation

• Income

Categories of mutual funds

• Closed-end funds

• Open-end funds

◦ Load

◦ No-load

• Domestic and international funds

• Money market funds

• Bond funds

• Stock funds

◦ Growth funds

◦ Income funds

◦ Sector funds

◦ Lifecycle or target date funds

Types of mutual funds

The key takeaway here is to note the sheer diversity inreturns over the years across seemingly similar assetclasses so look under the hood of a mutual fund beforechoosing a fund

*Historical returns table compiled by Invesco

Diversity of AssetClasses within the mutual fund universe

Costs associated with mutual funds

Considering this is your money understanding any and all fees is important

• No-load

• Front-end load (or initial sales charge) 

• Back-end load (or deferred sales charge)

• Management expense ratio

• Short-term trading fees

Fund A - 1% Fee Fund B - 1.25% Fee Fund C - 1.5% Fee

Growth of $1M After 30 Years

3,500,000

3,000,000

2,500,000

2,000,000

1,500,000

1,000,000

500,000

1 6 11 16 21 26 31

Period Ending

*Illustrates the growth of $1,000,000 over 30 years assuming an annual return rate of 5% across three hypothetical funds

Number of years invested Portfolio value lost to fees After-fee investment value Value lost to fees

10 $11,343 $166,000 6.4%

20 $61,696 $435,001 12.4%

30 $210,700 $914,215 18.7%

40 $592,798 $1,770,000 25.1%

How the cost of fees accelerates over time

*This example is based on a mid-cap mutual fund with a 1.02% expense ratio, or management fee

The top 6 questions you should ask beforebuying a mutual fund.

1What is the fund’s goal?

• Does it fit your objective?

• How long do you have to invest?

• What are your personal goals?

• Does it work with your other investments?

These are all important factors your chosen mutual fund(s) should align with to ensure you feel confident you’ve made the right investment decision

2How risky is it?

Overall statement

• What is your risk tolerance?

• What is your time frame for investing?

• Can you sleep at night without thing about the ups and downs of the market?

Usually, the higher the potential returns, the higher the risk

3How did it perform in the past?

• How does the fund compare to other funds with the same investment objective?

• Review a fund's performance for more than one year

• How did the fund perform in different market conditions?

• Review and assess any recent portfolio manager or strategy change

Past performance is not an indicator of future performance but can helpto get a deeper understanding

4What are its costs?

• Does the fund have any loads or sales charges?

• What is the expense ratio of the fund?

• Is the Management fees reasonable?

• Do you have any fees to pay when you buy or sell?

Comparing the fund’s costs and performance against those of similar fundswill shed light as to the kind of value you’re getting for your money

5Choose a Fund With a Winning Manager

Who runs the fund?

• What is the portfolio manager’s track record over the long-haul?

◦ And in various market cycles?

• How did the manager achieve those results?

• Does the fund have a sound strategy?

• Is the strategy definable?

• Is the fund's manager consistent with their strategy?

6How will I be taxed?

• What kind of account are you holding the mutual funds in?

• What types of distributions are usually made?

• How are they taxed?

• How are capital gains or losses taxed?

Knowing up front about how much you’ll have to pay in taxwill be prevent any surprises down the road

In Summary

What to know before investing

1. Objective

2. Risk

3. Performance

4. Costs

5. Management

6. Taxation

Resources

Where to find information

• Prospectus

• Summary Prospectus

• Fund Fact Sheet

• Company website

• Morningstar

Key Takeaways

After this webinar, you will be able to

• Identify definitions and characteristics relating to investing in mutual funds

• Consider and investigate mutual fund options

• Explain where mutual funds can be used to strengthen or build a portfolio

Certificates are sent via email 1 week after event

Also available for downloadon Wdesk University

Questions? Contacttraining@workiva.com

Claiming Your CE

A minimum of 50-minutes of participation is required for CE

The contents of this presentation are confidential. Copyright © 2019 Workiva Inc.

Questions?

training@workiva.com