What is Mutual Fund?

[Faith B]

What is mutual fund? A mutual fund is an investment company that collects money from investors and invests it in various types of assets. The money collected is usually invested in financial securities and money-market instruments. These investments may be made for a short-term, medium-term, or long-term. The risk of these funds depends on the asset class and the level of risk that the investors are willing to accept. To find out more about mutual funds, read the following sections of this article.

Mutual funds invest in securities. They pool the money of many investors and purchase a large number of securities. This gives the investors broad exposure and helps them avoid the burden of constantly monitoring multiple investments. In addition, a mutual fund manager has the benefit of being able to monitor all the investments. This gives an investor a wide range of options and allows them to focus on one investment rather than a whole portfolio. This makes investing in mutual funds a great option for aspiring investors.

A mutual fund is a type of investment company. It collects money from investors and allots units to them. A mutual fund unit is similar to a share of a company. Its Net Asset Value (NAV) is the price paid for the unit. The assets of a mutual funds are invested in stocks and bonds. These investments are managed by a fund manager, who determines how the portfolio is allocated.

 

[Jasmine]

The major difference between mutual funds and share market is, when you invests in share market you are taking care of your own investment, however, when you are investing in mutual funds, experts are taking care of your money. When you invest in mutual funds, experts will invest your money on your behalf. Even though investment is never risk free, you can trust mutual funds because they offer almost 0 percent risk.