Mutual Fund
Definition
What is Mutual Fund?
A pooled investmentAn asset or commitment of money made with the expectation of future income, growth, or both. vehicle that combines money from many investors into one professionally managed portfolioThe complete collection of investments owned by an investor or managed under one mandate..
Example in practice
How This Looks in Practice
A fund managerThe licensed firm responsible for investment decisions and day-to-day management of a fund. may combine $10,000 from one investorA person or organisation that commits capital with the expectation of a financial return. with contributions from thousands of others to buy treasury bills, bonds, or shares.
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Related Terms
Unit
A proportional ownership interest in a mutual fund.
Fund BasicsNet Asset Value
The value of a fund's assets minus its liabilities, usually expressed in total and per unit.
Fund BasicsAssets Under Management
The total market value of investments managed by a fund or investment manager.
Fund TypesMoney Market Fund
A mutual fund that invests mainly in short-term, relatively liquid instruments such as treasury bills and deposits.