Definition of mutual fund and how it works

[Wiserr]

Mutual fund defined from the Wikipedia,the free encyclopedia, A mutual fund is a professionally managed investment fund that pools money from many investors to purchase securities. These investors may be retail or institutional in nature.

Mutual funds have advantages and disadvantages even though the advantage tends to be much better, compared to direct investing in individual securities. The primary advantages of mutual funds are that they provide economies of scale, a higher level of diversification, they provide liquidity, and they are managed by professional investors. The disadvantage of mutual fund is that,mostly investors in a mutual fund must have to pay various fees and expenses.

Primary structures of mutual funds include open-end funds, unit investment trusts, and closed-end funds. Exchange-traded funds (ETFs) are open end funds or unit investment trusts that trade on an exchange. Mutual funds are also classified by their principal investments as money market funds, bond or fixed income funds, stock or equity funds, hybrid funds or other. Funds may also be categorized as index funds, which are passively managed funds that match the performance of an index, or actively managed funds.
There are many advantage and disadvantage of mutual fund, did you have anything to share with us about mutual funds folks

 

[Hassanbenjamin]

Mutual funds is a good investment then but the returns are not in any way comparable to that of the investments made and managed by a single individual because the profit or should I rather say the gain made will be shared in percentage that has been agreed by both parties at the time of the stake while on the other hand profits gotten from investments made by a single individual are gained by the investor only. But one good thing about most of the mutual fund platforms are most times managed by expert which makes it less risky because the experts run it in such a way that it will suffer less risk because it is operated under close watch. Individual investment is liable to face a degree of loss because it may be managed by an individual with no much knowledge on how things should be done or he may lose through some mistakes made. Mutual fund is the least risky one to go with.

 

[Jasmine]

Mutual finds investment is a method where you give your money to the experts to invest in profitable assets and markets. When you buy shares, you buy on your own, but when you invest in mutual funds, you give money to the investors for the promise of certain percent profits. Mutual funds is one of the least risky investment areas because the experts will be managing your funds