» Dictionary of Mutual Fund Terms » What are Mutual Funds

What are Mutual Funds

Mutual Funds: An investment instrument that allows the accumulation of the money of several investors with the purpose of achieving a common financial objective is called a mutual fund.

When you park your money in a mutual fund, you become its shareholder through the purchase of shares or portions of the fund. Additionally, every mutual fund has a fund manager, who operates with the fund's resources by investing them in securities such as stocks or bonds.

What makes mutual funds so attractive for the investors are their cost efficiency and ease of investment. This means that you just invest your money in a mutual fund and do not have to worry about exactly which securities to purchase.

Alternative Names - funds

For instance Mark decided that it is time to think about his retirement years and decided to start investing in a mutual fund.

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