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Mutual fund

Open-end funds Closed-end funds

Definition
An investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities Stocks, bonds, money market instruments and similar assets. Operated by a portfolio manager This manager then turns around and invests this large pool of shareholder money in a portfolio of various assets, or combinations of assets.

Mutual fund- Advantages


Increased diversification Daily liquidity Professional investment management Ability to participate in investments that may be available only to larger investors Service and convenience Government oversight Ease of comparison

Mutual fund- Disadvantages


Fees Less control over timing of recognition of gains Less predictable income No opportunity to customize Mutual funds cannot be bought or sold during regular trading hours, but instead are priced just once per day.

Different types of mutual funds


Closed-End Mutual Funds Open-End Mutual Funds Load Funds No Load Funds

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