Mutual fund definition

Send Important legal information about the email you will be sending. By using this service, you agree to input your real email address and only send it to people you know. It is a violation of law in some juristictions to falsely identify yourself in an email. All information you provide will be used solely for the purpose of sending the email on your behalf. The subject line of the email you send will be “Fidelity.com”. Mutual funds are investment strategies that allow you to pool your money together with other investors to purchase a collection of stocks, bonds, or other securities that might be difficult to recreate on your own. This is often referred to as a portfolio. The price of the mutual fund, also known as its net asset value (NAV) is determined by the total value of the securities in the portfolio, divided by the number of the fund's outstanding shares. This price fluctuates based on the value of the securities held by the portfolio at the end of each business day. Note that mutual fund investors do not actually own the securities in which the fund invests; they only own shares in the fund itself. In the case of actively managed mutual funds, the decisions to buy and sell securities are made by one or more portfolio managers, supported by teams of researchers. A portfolio manager's primary goal is to seek out investment opportunities that help enable the fund to outperform its benchmark, which is generally some widely followed index, such as the Standard & Poor...

What is a Mutual Fund? A mutual fund is a type of investment that pools funding from many individuals to invest in a wide range of securities, which may include stocks, bonds, and other assets. Mutual funds are a portfolio of investments managed by a Mutual funds are designed to give investors diversification without having to purchase individual securities themselves. Instead, investors purchase shares of the mutual fund, representing their ownership in the fund as well as the income it generates. How Mutual Funds Work Mutual funds are professionally-managed investment vehicles that give smaller investors access to a diversified portfolio of investments for a management fee. A mutual fund represents the investments of a mutual fund company, which issues shares that can be purchased. Investors purchase shares of a mutual fund at the The fund's performance is dependent on its underlying investments, which are typically made up of stocks, bonds, or a combination of securities outlined in the fund's prospectus. Fund managers typically have an investment objective for the fund, such as growth, or income, and will trade securities to align with those goals. Mutual funds pay investors via dividends, capital gains, or equity growth of the underlying investments. Types of Mutual Funds There are many types of mutual funds on the market today, each of them containing a unique collection of assets for different investment goals. Most mutual funds fall into one of these four categorie...

A mutual fund pools money from many investors and builds a portfolio of stocks, bonds or other securities. Mutual funds provide excellent diversification and professional management, making them a great choice for most regular investors. Understanding Mutual Funds A mutual fund is a financial company that sells shares to investors, and then invests the proceeds in securities like Professional investors spend a great time picking stocks and bonds to create well-balanced investment portfolios. It’s a challenging job that requires expertise and plenty of research to get it right. Mutual funds make this sort of expert management available to regular investors, for a reasonable fee. If you’re saving for retirement in a Mutual Funds and Diversification Mutual funds are utilized by novice and professional investors alike to pursue longer-term goals. Compared with other investment options, mutual funds are a popular choice because they provide easy You could choose to buy When you buy shares in one mutual fund, you’re investing in many companies and market sectors at once. By purchasing a mutual fund, you own a piece of the fund’s overall portfolio. For example, if a mutual fund owns 100 stocks, and you invest $1,000 in that fund, you own about $10 worth of each stock—minus any fees. Learn More On WealthFront's Website How Do Mutual Funds Work? Each mutual fund share represents an investor’s partial ownership of the fund. If the fund experiences profits or losses, they are shared ...

What Is a Money Market Fund? A money market fund is a kind of mutual fund that invests in highly liquid, near-term instruments. These instruments include cash, cash equivalent securities, and high-credit-rating, debt-based securities with a short-term maturity (such as U.S. Treasuries). Money market funds are intended to offer investors high liquidity with a very low level of risk. Money market funds are also called money market mutual funds. • A money market fund is a type of mutual fund that invests in high-quality, short-term debt instruments, cash, and cash equivalents. • Though not quite as safe as cash, money market funds are considered extremely low-risk on the investment spectrum. • A money market fund generates income (taxable or tax-free, depending on its portfolio), but little capital appreciation. • Money market funds should be used as a place to park money temporarily before investing elsewhere or making an anticipated cash outlay; they are not suitable as long-term investments. Tax-Exempt Money Fund A tax-exempt money fund offers earnings that are free from U.S. federal income tax. Depending on the exact securities it invests in, a tax-exempt money fund may also have an exemption from state income taxes. Municipal bonds and other debt securities primarily constitute such types of money market funds. Special Considerations The Net Asset Value (NAV) Standard All the features of a standard mutual fund apply to a money market fund, with one key difference. A mone...