Mutual fund

 

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Mutual fund

In the US, a collective investment scheme, operated by an investment company, which enables small private investors to invest in a diversified portfolio of shares, bonds and other securities.It is known as an open end fund since there is no fixed amount of capital in the fund. If new investors want to invest in the fund, it can issue new units and accept their money into the pool. If they want to turn their investment back into cash, it can cancel their units. The number of units in the fund, and the amount of money invested, goes up and down according to supply and demand.Funds are managed by professional fund managers who invest in securities to achieve the trust's objectives such as capital growth, income or a combination of both. Shares purchased from brokers are called load funds and those purchased direct from the fund company are called no load funds. Shares when sold are redeemed at their net asset value. There is a wide range of funds with a variety of objectives available in which to invest including capital growth and income. Similar to a unit trust in the UK.



Similar Matches

Demutualise

Demutualise

The process by which building societies and mutual insurers convert themselves from mutual organisations (owned by their members/customers) to profit-making companies which distribute profits to their shareholders.


Mutual fund custodian

Mutual fund custodian

A commercial bank or trust company that holds securities owned by a mutual fund and sometimes acts as transfer agent for the mutual fund.


Option mutual fund

Option mutual fund

A mutual fund that buys and sells options for aggressive or conservative investment.


Mutual savings bank

Mutual savings bank

A state-chartered savings bank which is owned by its depositors and managed by a fiduciary board of trustees.


Bond mutual fund

Bond mutual fund

A mutual fund holding mutual fund.


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