An open-ended fund operated by an investment company, which raises money from shareholders and invests in a group of assets, in accordance with a stated set of objectives. Benefits include diversification and professional money management. Shares are issued and redeemed on demand, based on the fund's net asset value, which is determined at the end of each trading session.
Mutual funds pool money from multiple investors (shareholders) to buy stocks, bonds, and other securities for the benefit of their shareholders. Mutual funds offer individuals diversification and professional management, but they limit an investor's ability to control his/her holdings and tax liability. Fund owners pay an expense ratio, which is a percentage of their total investment amount.
An investment company that pools deposits from many shareholders and invests in the stocks, bonds, or cash assets of many companies in order to achieve the specific objectives of the fund.