A mutual fund is a type of financial vehicle madeup 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 orincome for the fund's investors. A mutual fund's portfolio is structured and maintained to match the investment objectives stated in its prospectus.
- A mutual fund is a type of investment vehicle consisting of a portfolio ofstocks, bonds, or other securities.
- Mutual funds give small or individual investors access to diversified, professionally managed portfolios at a low price.
- Mutual funds are divided into several kinds of categories, representing thekinds of securities they invest in, their investment objectives, and the typeof returns they seek.
- Mutual funds charge annual fees (called expense ratios) and, in somecases, commissions, which can affect their overall returns.
- The overwhelming majority of money in employer-sponsoredretirementplans goes into mutual funds.