Family of Funds

Family of funds

A group of mutual funds offered by one investment company. Often, switching from one mutual fund to another can be done without incurring fees as long as both funds are in the same 'family'.

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Fund Family

A set of mutual funds managed by a single company. The funds within a fund family have different investment goals and/or strategies. However, because the same company manages the whole family, individual investors may generally move money from one fund to another without extra commissions or fees. This allows investors to be flexible in their own investment goals according to their particular needs at a given time. A fund family is also called a group of funds.

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family of funds

A group of mutual funds operated by the same investment management company. Investors are often able to transfer money between mutual funds within a particular family of funds at only a nominal charge. Thus, an investor with shares in a growth fund could move funds out of the growth fund and into a money market fund or a bond fund without paying a new sales charge if each of these funds is managed by a single investment firm. Investing money with a company permitting this flexibility is advantageous to the investor. Also called fund group, group of funds. See also fund switching.

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Family of funds. Many large mutual fund companies offer a variety of stock, bond, and money market funds with different investment strategies and objectives. Together, these funds make up a family of funds.

If you own one fund in a family, you can usually transfer assets to another fund in the same family without sales charges. The transaction is known as an exchange.

But unless the funds are in a tax-deferred or tax-free retirement or education savings plan, you'll owe capital gains taxes on increases in value of the fund you're selling.

Investing in a family of funds can make diversification and asset allocation easier, provided there are funds within the family that meet your investment criteria. Investing in a family of funds can also simplify recordkeeping.

However, the advantages of consolidating your assets within one fund family are being challenged by the proliferation of fund networks. Fund networks, sometimes called fund supermarkets, make it easy to spread your investments among several fund families.