7 Replies to “what is mutual funds?”

  1. A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors to buy stocks, bonds, short-term money market instruments, and/or other securities


    Adapted from The Right Way to Invest in Mutual Funds (Warner Books, 1996) and Investing for the Financially Challenged (Warner Books, 1999), both by MONEY Magazine senior editor Walter Updegrave.

    A mutual fund pools money together from thousands of small investors and then its manager buys stocks, bonds or other securities with it.

    When you contribute money to a fund, you get a stake in all its investments.

    That’s a big deal: Since most funds allow you to begin investing with as little as a couple thousand dollars, you can attain a diversified portfolio for much less than you could buying individual stocks and bonds. Plus, you don’t have to worry about keeping track of dozens of holdings – that’s the fund manager’s job.

    The price for a share of a open-end fund is determined by the net asset value, or NAV, which is the total value of the securities the fund owns divided by the number of shares outstanding.

    If a mutual fund has a portfolio of stocks and bonds worth $ 10 million and there are a million shares, the NAV would be $ 10 (Rs – 10) . A fund’s NAV changes every day, depending on the price fluctuations of the fund’s holdings.

    The NAV is the price at which you can buy and sell shares, as long as you don’t have to pay a sales commission, or “load.” You have to pay loads when you buy from a broker, financial planner, insurance agent or other adviser.

  2. Mutual fund is an actively managed fund that pools together the money of many investors and invest them in stocks or bonds. However, due to its active management, it charges a significant amount of fees, which takes up a chunk of our returns.

  3. A mutual fund is a piece of junk investment mass marketed to people because companies and brokers get huge kickbacks. It will likely make you a few percentage points per year resulting in “slow, gradual returns” although there is no guarantee of that. Honestly, I am biased but there have to be dozens of better investments than mutual funds. Mutual funds are only better than a savings account on the investment scale.

  4. They take your hard earned money and give you little in return, But what is good news is your money is pooled together with other and your not alone.

  5. the process of investing/ and distributing the profit/loss to investors . instead of it being done by individual it is done by an agent who gets commisssion for this act that is all

  6. Mutual fund is a pool of money contributed by individuals to invest in a predetermined security like Stocks, bonds, money markets, etc. The mutual fund is managed by a fund manager who is responsible for investing the money into various securities.

    Bottomline: If you are new to stocks and cannot do independent research on stocks to invest your money… you can choose mutual funds which are managed by professionals and who in turn invest in stocks.

  7. HI,

    I think mutual fund is better option for investing money. it safe and secure way to investing money.

    basically mutual fund are two types.

    One is open ended and second one is close ended.

    in open ended mutual fund you any time enter and exit.

    And in close ended mutual fund locking period. in this period you have not enter or exit without complete your time period.

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