the returns on mutual funds are certainly not guaranteed. the returns depend on the types of investments you allow your manager to make, and the effectiveness of that manager and his support team. fees and expenses also factor into that equation.

in 5 years, you might have turned that 10k into 100k or 1m.
or, the fund might have failed by then, and you could have lost it all.

this is why you should take your time and do your research, so that you can find a fund where you are comfortable with the investment objectives, and the associated risks.

Mutual funds declare distributions (dividends or capital gains) each year, which are considered profits and therefore are taxable. In general, I go for funds that have no 12b-1 fee and no loads to keep overheads low.

Here are some of the traditional and distinguishing characteristics of closed-end funds:

Closed-end funds generally do not continuously offer their shares for sale. Rather, they sell a fixed number of shares at one time (in the initial public offering), after which the shares typically trade on a secondary market, such as the New York Stock Exchange or the Nasdaq Stock Market.

The price of closed-end fund shares that trade on a secondary market after their initial public offering is determined by the market and may be greater or less than the shares’ net asset value (NAV).

Closed-end fund shares generally are not redeemable. That is, a closed-end fund is not required to buy its shares back from investors upon request. Some closed-end funds, commonly referred to as interval funds, offer to repurchase their shares at specified intervals.

The investment portfolios of closed-end funds generally are managed by separate entities known as "investment advisers" that are registered with the SEC.

Closed-end funds also are permitted to invest in a greater amount of "illiquid" securities than mutual funds. (An "illiquid" security generally is considered to be a security that can’t be sold within seven days at the approximate price used by the fund in determining NAV.) Because of this feature, funds that seek to invest in markets where the securities tend to be more illiquid are typically organized as closed-end funds.
Closed-end funds come in many varieties. They can have different investment objectives, strategies, and investment portfolios. They also can be subject to different risks, volatility, and fees and expenses.

Keep in mind that just because a fund had excellent performance last year does not necessarily mean that it will duplicate that performance. For example, market conditions can change and this year’s winning fund could be next year’s loser. To understand the factors you should consider before investing in a mutual fund, read Mutual Fund Investing: Look at More Than a Mutual Fund's Past Performance. In addition, you should carefully read all of a fund’s available information, including its prospectus and most recent shareholder report before purchasing mutual fund shares.

Closed-end funds are subject to SEC registration and regulation, and are subject to numerous requirements imposed for the protection of investors. Closed-end funds are regulated primarily under the Investment Company Act of 1940 and the rules adopted under that Act. Closed-end funds are also subject to the Securities Act of 1933 and the Securities Exchange Act of 1934. You can find the definition of "closed-end company" in Section 5 of the Investment Company Act.

Basically, a mutual fund is an investment vehicle that pools the money of investors and gives it to a manager that invests in stocks, bonds, cash, or a combination of stocks and bonds. Mutual funds also invest in commodities. You get dividends, stock dividends, and bond payments for holding shares of a mutual fund. The best funds to go for are no-load mutual funds that have expense ratios under 1%. Good luck.

Here is a good article on selecting Mutual Fund:
http://creating-wealth.blogspot.com/2007/06/how-to-select-mutual-fund.html

There are many different kinds of mutual funds that you can buy. Ones that invest in large cap growth stocks, small cap growth socks, bonds, foreign stocks, you name it and there is probably a fund that invests in it.

Many funds do not perform too well, about 70%. So you have to be very selective in choosing the fund or funds that you wish to invest in. Morningstar rates funds from 1 star–poorest–to 5 stars–best, in their category. Yahoo finance carries these Morningstar ratings. But these are only open ended funds. For some odd reason they do not rate closed end funds.

Enclosed is a link to closed end and index funds.

http://www.etfconnect.com/

Since you are a newcomer, you will benefit from going to your library or book store and getting "Mutual funds for Dummies"

Many mutual funds have shown a long term annual return of better than 10%. That should give you an idea on how much profit you might make.

Because they invest in a pool of investment tools, they are well-diversified instruments, and so have less risk than individual stocks and derivatives. Invested over time, these returns can compound to very attractive sums unlike savings. With the right funds and proper planning, you can reap good returns.

Depending on where you are from, you can get it from online distributors or brokerages.

Hope the information helps!

Bonds are like I owe you's.

Mutual funds pool money together from investors and give to a professional manager and they invest in stocks, bonds, and money markets.

A mutual fund is an investment that pools money of investors together, then gives it to a money manager than invests in a number of securities, such as stocks, bonds, money markets, real estate, precious metals, etc.

For now, I'd put that money in a savings account.