Financial Glossary: Mutual Fund


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Mutual Fund

Mutual Fund

An investment company that enables investors to Pool their funds with other investors in order to invest in a professionally managed diversified Portfolio of securities.

The three major types of mutual funds are Money Market, Bond, and stock.A mutual fund is a professionally managed firm of collective investments that collects money from many investors and puts it in stocks, bonds, Short-term Money Market instruments, and/or other securities

Known also as an Open-end fund, or a unit Trust in the UK, mutual funds are pooled investment vehicles. They mostly invest in stocks and bonds of companies and public authorities. They Offer small investors the chance to spread their investment widely. An investor who wishes to invest in a mutual fund simply buys new shares in the fund, which then expands in size. Sellers can only sell their shares back to the fund, which shrinks accordingly. Mutual funds are typically run by specialist companies.

Posted by Marcus evans Summits

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