Mutual funds are investment strategies that allow you to put your money together with other investors to buy a collection of shares, bonds or other securities that can be difficult to recreate on your own.
Mutual funds are investment vehicles that pool money from multiple investors to purchase a collection of securities managed by a portfolio manager. Portfolio Manager creates portfolios for investment with a pool of money and often have different types of investment goals.
Shares in a mutual fund are usually purchased at the current Net Asset Value (NAV) of the fund per share. Investors buy shares in the mutual fund, which in turn gives them a claim to the fund's assets (the mutual fund profits). As soon as investors buy in a mutual fund, their money is used by the fund manager to invest in different securities with certain risk and return goals - such as long-term growth or fixed income.
Investors buy shares in the fund and the mutual fund companies get that money to invest on their behalf. One mutual fund may contain hundreds of shares - reducing the risk of loss for investors, if any of the individual funds are poorly managed.
Mutual funds are investment vehicles that pool money from multiple investors to purchase a collection of securities managed by a portfolio manager. Portfolio Manager creates portfolios for investment with a pool of money and often have different types of investment goals.
Shares in a mutual fund are usually purchased at the current Net Asset Value (NAV) of the fund per share. Investors buy shares in the mutual fund, which in turn gives them a claim to the fund's assets (the mutual fund profits). As soon as investors buy in a mutual fund, their money is used by the fund manager to invest in different securities with certain risk and return goals - such as long-term growth or fixed income.
Investors buy shares in the fund and the mutual fund companies get that money to invest on their behalf. One mutual fund may contain hundreds of shares - reducing the risk of loss for investors, if any of the individual funds are poorly managed.
Most mutual funds are divided into one of the 6 main categories -
- Equity Funds
- Debt Funds
- Hybrid Funds
- ELSS Funds
- Money Market Fund
- Index Fund
Mutual funds provide investors with the opportunity to purchase professionally managed and diversified securities that can be industry-specific. Mutual funds may charge a fee if investors transfer their shares to another fund within the same fund group. In addition, since you own a portion of the mutual fund, you also pay ongoing expenses to cover the cost of operating the fund, which includes investment advisory fees (payment of the fund manager and research staff), as well as transaction costs associated with the purchase and sale of securities in the fund.
