mutual fund
An open-ended fund operated by an investment company which raises money from shareholders and invests in a group of assets, in accordance with a stated set of objectives. mutual funds raise money by selling shares of the fund to the public, much like any other type of company can sell stock in itself to the public. Mutual funds then take the money they receive from the sale of their shares (along with any money made from previous investments) and use it to purchase various investment vehicles, such as stocks, bonds and money market instruments. In return for the money they give to the fund when purchasing shares, shareholders receive an equity position in the fund and, in effect, in each of its underlying securities. For most mutual funds, shareholders are free to sell their shares at any time, although the price of a share in a mutual fund will fluctuate daily, depending upon the performance of the securities held by the fund. Benefits of mutual funds include diversification and professional money management. Mutual funds offer choice, liquidity, and convenience, but charge fees and often require a minimum investment. A closed-end fund is often incorrectly referred to as a mutual fund, but is actually an investment trust. There are many types of mutual funds, including aggressive growth fund, asset allocation fund, balanced fund, blend fund, bond fund, capital appreciation fund, clone fund, closed fund, crossover fund, equity fund, fund of funds, global fund, growth fund, growth and income fund, hedge fund, income fund, index fund, international fund, money market fund, municipal bond fund, prime rate fund, regional fund, sector fund, specialty fund, stock fund, and tax-free bond fund.
Mentioned in these terms
Related Terms on BusinessDictionary
closed-end mutual fund
money market fund (MMF)
value funds
balanced mutual fund
non-depository financial institution
fund size
vulture funds
offshore fund
withdrawal plan
gold fund
x or xd
closed to new investors
option fund
government income fund
common stock fund
penalty plan
contingent deferred sales charge (CDSC)
pooled investment vehicle (PIV)
implied cost
cumulative return
regulated investment company
investment grade fund
disintermediation
junk bond fund
right of accumulation
drag on returns
runoff
equity income fund
accumulation unit
SEC yield
ethical investment
adjustable rate mortgage fund
technology fund
microcap fund
Asian funds
Morningstar system
umbrella fund
MSCI-EAFE index
fully invested
fund focus
average annual total return
loan participation fund
tracking error
real estate investment trust (REIT)
money market fund (MMF)
value funds
balanced mutual fund
non-depository financial institution
fund size
vulture funds
offshore fund
withdrawal plan
gold fund
x or xd
closed to new investors
option fund
government income fund
common stock fund
penalty plan
contingent deferred sales charge (CDSC)
pooled investment vehicle (PIV)
implied cost
cumulative return
regulated investment company
investment grade fund
disintermediation
junk bond fund
right of accumulation
drag on returns
runoff
equity income fund
accumulation unit
SEC yield
ethical investment
adjustable rate mortgage fund
technology fund
microcap fund
Asian funds
Morningstar system
umbrella fund
MSCI-EAFE index
fully invested
fund focus
average annual total return
loan participation fund
tracking error
real estate investment trust (REIT)
management expenses
automatic investment plan
net asset value (NAV)
open end mutual fund
open end investment company
diamonds
redemption fee
distribution date
management fee
expense ratio
assets under management
Glass-Steagall Act
managed fund
management company
unit investment trust (UIT)
front end load
load fund
unit trust
no load fund
capital gains distribution
investment adviser
adviser
back-end load
total return
interest rate swap
global
sales charge
redemption
duration
institutional investors
premium
financial institution
unit
automatic investment plan
net asset value (NAV)
open end mutual fund
open end investment company
diamonds
redemption fee
distribution date
management fee
expense ratio
assets under management
Glass-Steagall Act
managed fund
management company
unit investment trust (UIT)
front end load
load fund
unit trust
no load fund
capital gains distribution
investment adviser
adviser
back-end load
total return
interest rate swap
global
sales charge
redemption
duration
institutional investors
premium
financial institution
unit
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mutual fund is ...
... part of the Mutual Funds and Stocks subjects.
... #12 on our list of the most popular terms.
... an essential investing term.
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