What is mutual fund?

Question

Accepted Answer

A mutual fund is a type of investment vehicle that pools money from multiple investors to invest in a diversified portfolio of securities.

Mutual funds are managed by professional fund managers.
Investors buy shares of the mutual fund, which represent a portion of the holdings.
Mutual funds offer diversification, as they invest in a variety of assets such as stocks, bonds, and money market instruments.
They provide access to professional investment management and allow small investors to participate in a wide range of securities.
Mutual funds can be actively managed or passively managed (index funds).
They charge fees, such as expense ratios and sales loads, which impact the overall returns.
Examples of mutual fund companies include Vanguard, Fidelity, and BlackRock.

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