What is a Mutual Fund?
Today’s tip will cover “What is a mutual fund?”
A Mutual fund is an investment vehicle made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets.
Mutual funds are operated by money managers, who invest the fund’s capital and attempt to produce capital gains and income for the fund’s investors. So basically, mutual funds are an investment vehicle whereby you and many other people give money to a money manager, who then buys securities with these collective funds. Each person who gave money to that money manager then becomes a shareholder in the mutual fund. You end up owning a proportionate amount of the fund and as the securities in the fund go up and down, the price of the mutual fund goes up and down with it.
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