Mutual Funds
A mutual fund is a pool of money managed by a professional Fund Manager
What are mutual funds?
A Mutual Fund is a pool of investment that is managed by various professional money managers. They used to trade on exchanges and simultaneously provide on accessible way for the investor to access a wide range mix of assets which are selected for the fund.
A Mutual fund pools money from many investors to purchase a diversified portfolio of stocks, bonds or other securities.
When you invest in a mutual fund, you’re basically hiring various professional money managers to make all the investment decisions on your part. The professional managers basically put their emphasis by doing research, select securities and monitor performance according to the stated objective of the fund, whether its aggressive growth, steady income or simply matching a market index.
Why do people buy mutual funds?
Mutual funds are a popular choice among investors because they generally offer the following features:
Professional Management.
The fund managers do the research for you. They select the securities and monitor the performance.
Diversification
Diversification or “Don’t put all your eggs in one basket.” Mutual funds typically invest in a range of companies and industries. This helps to lower your risk if one company fails.
Affordability.
Most mutual funds set a relatively low dollar amount for initial investment and subsequent purchases.
Liquidity
Mutual fund investors can easily redeem their shares at any time, for the current net asset value (NAV) plus any redemption fees.