FAQ – Mutual Fund Investing

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Can I invest directly in mutual funds within my 403(b) and, if so, what should I look for?

Yes! You can invest directly in mutual funds in your 403(b) plan, and that's called a 403(b)7. For most folks, the No. 1 consideration would be an investment objective that is in line with your financial goals, timeline and risk tolerance. For example, if you are a long-range investor who is pursuing maximum growth and doesn't flinch at daily fluctuations in value, an aggressive equity fund may make sense for you. But if you are nearing retirement or drops in value make you lose sleep, you may want to choose a more conservative fund. The other factors to consider are fund management, major holdings, operating expenses and other fees. Ask your advisor for the total mutual funds fees, including any annual costs and the expense ratio. You can also find the fees by checking out the mutual fund summary information or prospectus supplied by the vendor. Or, check out various funds and their expense ratios at Morningstar. (Note that this Web site address is provided for information only. No endorsement by CTA is implied.) 

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