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Find More Details On This Page ="p__3">Funds are pooled instruments managed by
financial investment managers that enable financiers to buy stocks, bonds, favored shares,
products, etc. The two most common types of funds are mutual funds and exchange-traded
funds or ETFs. Mutual funds do not trade on an exchange and are valued at the end of the
trading day; ETFs trade on stock exchanges and, like stocks, are valued continuously
throughout the trading day. Shared funds and ETFs can either passively track indices, such
as the S&P 500 or the Dow Jones Industrial Average, or can be actively managed by fund
managers.
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This is a catch-all classification that consists of hedge funds and personal equity. Hedge
funds are so-called since they can hedge their investment bets by going long and short on
stocks and other financial investments. Personal equity allows business to raise capital
without going public. Hedge funds and personal equity were generally just readily available to
affluent investors considered "recognized investors" who met specific earnings and net worth
requirements. However, recently, alternative financial investments have actually been
presented in fund formats that are available to retail investors.