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Home Categories Guide to Mutual Funds The 12b-1 fund bears the 12b-1 commission, which covers the fund’s selling and distribution costs. An abnormal return is a return that deviates from the expected return on an investment. The turnover rate is calculated by counting the number of times an asset, security or payment changes hands during a year. An asset management company (AMC) invests pooled client funds in various securities and assets. Balanced funds are mutual funds that invest money in a variety of asset classes, including stocks and bonds with low to medium risk. A business development company (BDC) is a type of closed-end fund that invests in growing and financially troubled firms. The initial capital of a closed-end fund is formed by a one-time placement of a limited number of shares of the fund. Mixed - this is when an investment manager accumulates money from several investors and combines them into one fund. A feeder fund is one of many small investment funds that pool investors’ money, which are then combined into a single centralized master fund. A floating rate fund is a fund that invests in financial instruments with variable or floating interest rates. A floating rate fund invests in bonds and debt instruments, the interest payments on which fluctuate depending on the level of the base interest rate.