What is a Mutual Fund?

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Mutual funds give people a way to invest in a diverse mix of stocks, bonds, or other securities by buying shares of a financial vehicle that’s managed by a professional.

🤔 Understanding mutual funds

Mutual funds are professionally managed financial vehicles that allow people to invest in a portfolio of securities, which may include stocks, bonds, money market instruments and other securities.The investment decisions for mutual funds are made by professional managers, and they’ve become a popular offering in company-sponsored retirement plans. But their convenience isn’t free: Mutual funds come in different share classes with different fees and expenses. The potential risk and rewards of mutual funds are discussed in each fund’s prospectus.


Buying a share in a mutual fund is kind of like buying a pre-packaged salad...

Everyone who owns a share in a mutual fund gets the same mix of investments, whether that’s stocks, bonds, or cash. As the value of the fund as a whole rises or falls in value, each person’s investment fluctuates with it.

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