Investor Education – UNDERSTANDING MUTUAL FUND INVESTING

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A mutual fund is an investment vehicle that pools together the funds of various investors—both individuals and corporations. The pool of funds is managed by a professional fund manager who uses the funds to create a diversified investment portfolio consisting of various investment instruments such as stocks and bonds.

Mutual  Fund Quick Facts

    •  It pools the money of people, with the same investment objectives, through the issuance of shares.
    •  The resulting size of the fund allows it to invest in a basket of securities.
    •  It is managed by full-time professionals.
    •  Investors in a mutual fund are considered part owners or shareholders of the fund.
    •  Shareholders are entitled to a proportionate share in investment income and risk exposure.
    •  Each share represents a proportionate ownership in all the fund’s underlying securities
    •  Earnings in a mutual fund are based on Net Asset Value Per Share (NAVPS)