Examples of mutual fund in a Sentence
She invested her money in a mutual fund.
First Known Use of mutual fund
Financial Definition of MUTUAL FUND
What It Is
How It Works
Mutual funds may include investments in stocks, bonds, options, futures, currencies, treasuries and money market securities. Depending on the stated objective of the fund, each will vary in regard to content and risk.
Funds issue and redeem shares on demand at the fund's NAV, or net asset value. Mutual fund management fees typically range between 0.5% and 2% of assets per year, but 12b-1 fees, exchange fees and other administrative charges also apply.
There are several different types of mutual funds you should be aware of:
Additionally, a given mutual fund will issue different classes of its shares to investors. The most common variations of share classes for load mutual funds are front-load A shares, back-end load B shares, and level-load C shares.
Why It Matters
It is an important for an investor to consider mutual funds among their investment opportunities. Just as with any investment, the pros and cons must be compared.
Advantages of investing in mutual funds include:
Many funds charge hefty fees, leading to lower overall returns.
Over time, statistics have shown that most actively managed funds tend to underperform their benchmark averages.
Mutual funds cannot be bought or sold during regular trading hours, but instead are priced just once per day.
MUTUAL FUND Defined for English Language Learners
Definition of mutual fund for English Language Learners
: a type of investment in which the money of many people is used to buy stock from many different companies
Learn More about mutual fund
Britannica.com: Encyclopedia article about mutual fund
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