Mutual Fund Trading

What is a mutual fund?

A mutual fund is a pooled investment vehicle that collects money from multiple investors to purchase a diversified portfolio of securities such as stocks, bonds, or money market instruments. Professional fund managers make investment decisions on behalf of shareholders, aiming to achieve specific investment objectives outlined in the fund's prospectus.

Common mutual fund categories include:

• Equity Funds: Invest primarily in stocks across various market capitalizations, sectors, and investment styles.
• Bond Funds: Focus on fixed-income securities including government, corporate, and municipal bonds.
• Money Market Funds: Invest in short-term, high-quality debt instruments, offering stability and liquidity. You can find more information on Money Market Fund Trading here.
• Balanced/Hybrid Funds: Combine stocks and bonds to provide diversification across asset classes.
• Index Funds: Track specific market indexes such as the S&P 500 or bond market benchmarks.
• Target-Date Funds: Automatically adjust asset allocation based on a specified retirement date.

How do mutual funds differ from ETFs or individual stocks?

Mutual funds, ETFs, and individual stocks differ across four key areas: structure, pricing, management style, and minimum investment requirements.

1. Structure: Mutual funds can be both close and open-ended investment companies that issue and redeem shares directly with investors. ETFs trade on exchanges like stocks, while individual stocks represent ownership in a single company.
2. Pricing: Mutual funds are priced once per day at their Net Asset Value (NAV), calculated after market close (typically 4:00 PM ET) by taking the total value of all the fund’s assets, subtracting any liabilities, and dividing by the number of shares outstanding. When you buy or sell mutual fund shares, your trade is executed at that end-of-day NAV price, not at the price at the time you place the order. ETFs and stocks trade throughout the day at market prices that fluctuate continuously.
3. Management Style: Mutual funds can be actively managed (where managers actively select securities to outperform the market) or passively managed (tracking a specific index). ETFs are often passively managed index funds, though actively managed ETFs exist. Individual stocks require self-directed management.
4. Minimum Investment: Mutual funds may require minimum initial investments, while stocks and ETFs can typically be purchased in any quantity (including fractional shares on some platforms).

Which mutual funds are supported on Webull?

Only SEC-registered, U.S.-domiciled mutual funds are eligible for trading on the platform. However, not all U.S. mutual funds will be available, as availability varies by the specific fund.

Can I view fund details before investing?

Yes. We provide access to key fund information, such as current NAV and historical performance, expense ratio and fee structure within the trading rules section, the fund's objective and strategy, top holdings and asset allocation within the portfolio section, and a link to the fund's prospectus within investment relations section.

To view fund details:

App:

1. Use the search bar within the Markets page to locate the mutual fund by name or ticker symbol.
2. Tap on the fund to view its profile, which includes detailed information, including performance charts under Investor Relations, fund documents such as the prospectus, and investment strategy.

Which account types support mutual fund trading?

Mutual fund trading is supported for IRA accounts only. Additionally, only permanent residents will be able to trade mutual funds. Mutual fund availability will vary based on the specific mutual fund.

How do I apply for mutual fund trading?

You can enable mutual trading when opening a new account. If you opened your account prior to mutual funds being released, you will be prompted to apply for mutual fund trading when placing your first mutual fund order. You can also apply at any time from the account management page on the mobile app. Each account must be approved for mutual fund trading individually.

To apply for mutual fund trading:

App:

1. Select Menu.
2. Select Settings.
3. Select Account Management.
4. Select Mutual Fund Trading under your account.

How do I invest in a mutual fund?

Once your account is approved for mutual fund trading, you can only place orders through the mobile app.

To invest in mutual funds:

App:

1. Search for the mutual fund using the search bar within Markets.
2. Tap on the fund to open its detail page.
3. Tap Trade.
4. Enter the dollar amount you wish to purchase.
5. Review the order details, including the estimated NAV, estimated percent change and any applicable fees.
6. Tap Confirm to submit your order.

How do I redeem a mutual fund?

To redeem mutual funds:

App:

1. Tap the Account icon at the bottom of the screen.
2. Select the account that holds the mutual fund.
3. Under My Positions, in the Assets tab, select the mutual fund.
4. Select Redeem.
5. Enter the quantity you would like to redeem.
6. Tap Review.
7. Tap Confirm to submit the redemption request.

What order types are available for mutual funds?

Mutual fund orders are executed at the fund's next calculated Net Asset Value (NAV), which is determined once per day after market close. All mutual fund orders are effectively NAV-based orders that execute at the closing price calculated for that trading day. Due to this pricing structure, limit, market, and stop orders are not supported for mutual funds.

When are mutual fund trades executed and settled?

Mutual fund trades execute at the fund's next calculated Net Asset Value (NAV), which is determined after market close each business day (typically around 4:00 PM ET). Some mutual funds may have earlier cutoff times (e.g., 3:00 PM ET), which can be found in the fund’s prospectus. Due to this, you will not know the exact execution price at the time you place your order. The final execution price is determined after market close.

• Orders placed before 4:00 PM ET (or the fund's cutoff time) on a business day execute at that day's NAV and settle one business day later. Your position will also display in your account the following business day.
• Orders placed after 4:00 PM ET, after the fund's cutoff time, or on weekends or holidays execute at the next business day's NAV and typically settle two business days after placement. Your position will also display in your account two business days after the order was placed. For example, a buy order placed at 4:05 PM ET on Monday will trigger based on Tuesday's end of day NAV and will display in your positions list on Wednesday morning.

Can I set up automatic dividend reinvestment for mutual funds?

Dividends and capital gains are automatically reinvested to purchase additional shares of your mutual fund at NAV once purchased. You can change your dividend payment preferences in the mobile app if you would like to have dividends credited to your account as cash. Any changes will apply to all mutual fund positions in the account. Individual dividend reinvestment settings for specific mutual funds are not currently supported. Additionally, dividend reinvestment may not be available for all mutual funds.

To change your dividend reinvestment settings:

App:

1. Select Menu then Settings.
2. Select Account Management.
3. Select Funds Dividend Payment.

Are there redemption fees or minimum holding periods?

Some mutual funds impose short-term redemption fees or minimum holding periods to discourage frequent trading and protect long-term shareholders. These fees and requirements are established by the fund company, not by Webull. We don’t currently offer any funds with short-term redemption fees. All applicable fees and holding requirements are disclosed in the fund's prospectus. Please review this document carefully before investing to understand any restrictions that may apply.

Are there fees for buying or selling mutual funds?

We charge a transaction fee of the lesser of 3% of the transaction amount or $14.95 for mutual fund purchases and sales. These fees do not apply to money market funds. Additionally, mutual funds themselves may have associated costs, including:

• Expense Ratios: Annual fees charged by the fund to cover management and operational costs, expressed as a percentage of assets.
• 12b-1 Fees: Marketing and distribution fees that some funds pass on to shareholders.
• Front-End or Back-End Loads: Sales charges applied when you buy (front-end) or sell (back-end) fund shares. Webull primarily offers no-load funds, but some funds may have load structures.

All fund-specific fees are disclosed in the fund's prospectus. Please review this document carefully to understand the total cost of investing in a particular mutual fund.

Can I transfer mutual funds to or from another brokerage?

No, mutual funds can’t be transferred to or from another brokerage at this time.

Are mutual funds covered by SIPC protection?

Yes. Mutual fund holdings in your account are protected under SIPC (Securities Investor Protection Corporation) coverage, which protects securities customers of member firms if the firm fails financially. For more information on SIPC coverage, visit www.sipc.org or refer to the FDIC and SIPC Insurance FAQ.