A mutual fund is a type of investment vehicle consisting of a portfolio of stocks, bonds, or other securities, which is overseen by a professional money manager.
 | | Term of the Day | Words to Know | | |  | | Mutual Fund | A mutual fund is a type of financial vehicle made up of a pool of money collected from many investors to invest in securities like stocks, bonds, money market instruments, and other assets. Mutual funds are operated by professional money managers, who allocate the fund's assets and attempt to produce capital gains or income for the fund's investors. A mutual fund's portfolio is structured and maintained to match the investment objectives stated in its prospectus.
Mutual funds give small or individual investors access to professionally managed portfolios of equities, bonds and other securities. Each shareholder, therefore, participates proportionally in the gains or losses of the fund. Mutual funds invest in a vast number of securities, and performance is usually tracked as the change in the total market cap of the fund—derived by the aggregating performance of the underlying investments. | | Read More » | | Mutual Funds vs. ETFs: What's the Difference? | | Mutual funds and ETFs are both created from the concept of pooled fund investing which bundles securities together to offer investors the benefit of a diversified portfolio. Learn about some of the differences that make them attractive to investors. | | Read More » | | | Fund Manager | | Learn more about fund managers, who oversee a portfolio of mutual or hedge funds and make final decisions about how they are invested. | | Read More » | | | Net Asset Value | | Net Asset Value is a mutual fund's assets less its liabilities, divided by the number of shares outstanding, and is used as a standard price measure. | | Read More » | | | Dividend Yield | | A financial ratio that shows how much a company pays out in dividends each year relative to its share price. | | Read More » | | | Growth Fund | | Growth funds invest in rapidly expanding companies that typically do not pay dividends but reinvest excess capital to fuel further growth. | | Read More » | | | | | | CONNECT WITH INVESTOPEDIA | | | | | | | |
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