What are mutual funds?
A mutual fund is simply a collection of stocks and/or bonds. Mutual funds are financial intermediaries — they are set up to receive your money and then make investments with the money. Most mutual funds are “actively managed,” meaning the mutual fund shareholders, through a yearly fee, pay a mutual fund manager to actively buy and sell stocks or bonds within the fund. When you buy mutual fund shares, you are a shareholder — an owner — of that mutual fund, with voting rights in proportion to your ownership of the fund.
A mutual fund refers to a collective investment scheme under which professional fund managers pool money from individual investors and manage it according to pre-set investment objectives. The investment objectives can range from maximizing capital gains to maintaining a stable stream of income, and from beating inflation to preserving capital. Based on the designated objectives, the fund manager will invest the money in equities, bonds, currencies or other relevant investment instruments in a specific market or different markets around the world. Unlike stocks, when you buy or sell funds, you will not know the price at which you buy or sell real- time. Most funds are dealt on a daily basis using forward pricing. This means that when you buy or sell or switch in or out of a fund, you do not know the buy/sell price at which the transaction will be executed until the next dealing day. The reason for this is that unlike an individual stock or bond, each fund holds a basket of securities.
For most people, investing in securities is done through mutual funds. A simple definition of a mutual fund is investors pooling their money to invest stocks, bonds and other accounts. There are several advantages to investing through mutual funds, but the two most important advantages are diversification and professional management Mutual funds allow investors to cut down on the risks associated with investing in securities by diversifying investments. Because your money is combined with a large number of other investors’ funds, you have the ability to invest in a huge range of securities. Many of the investments would be unavailable to you otherwise because the minimum cost of investing would be too high for an individual investor. Another reason mutual funds make diversification possible is that they are easy and inexpensive to buy into, and often do not charge fees and commissions for reinvesting dividends and gains or for transferring investments within a mutual fund. While not ev
Mutual funds are investment companies that pool money from investors at large and offer to sell and buy back its shares on a continuous basis and use the capital thus raised to invest in securities of different companies. As an investor in a mutual fund, you own a portion of the fund, sharing in any increases or decreases in the value of the fund. A mutual fund may focus on stocks, bonds, cash, or a combination of these asset classes. Mutual funds offer a number of advantages, including diversification, professional management and cost efficiency Diversification. A mutual fund spreads your investment dollars around better than you could do by yourself. This diversification tends to lower the risk of losing money. Diversification usually results in lower volatility, because when some investments are doing poorly, others may be doing well. Professional management. Many people don’t have the time or expertise to make investment decisions. A mutual fund’s investment managers, however, are
Mutual fund is a form of collective investment where individuals and companies can easily and comfortably invest in stocks, bonds, or money market instruments. The concept is very simple! It is by pooling funds from the investors who have similar investment objectives into a “container”. Investment Manager will then manage the funds collected in these containers by investing into different kinds of stocks, bonds, and money market instruments; with the aim to help investors achieve their investment objectives.
