Exchange Privilege
The opportunity given to a mutual-fund shareholder to exchange a fund for another within the same fund family at no additional cost.
Investopedia Commentary
This privilege allows investors to switch funds when market conditions change. For example, you might want to be in an aggressive growth fund when the market is going up, but when the markets start heading downward, you may switch to a bond fund.
There is usually a limit as to how many times per year you can switch to other funds within a family.
Related Links
Mutual Fund Basics Tutorial
Maintaining Your Mutual Fund Equilibrium
When To Sell A Mutual Fund
Understanding Cycles - The Key To Market Timing
See also: Growth Fund, Load Fund, Mutual Fund, Switching
exchange privilege