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Mutual fund

• Mutual funds are pools of money that are managed by an investment company. They offer investors a variety of goals, depending on the fund and its investment charter. Some funds, for example, seek to generate income on a regular basis. Others seek to preserve an investor's money. Still others seek to invest in companies that are growing at a rapid pace. Funds can impose a sales charge, or load, on investors when they buy or sell shares. Many funds these days are no load and impose no sales charge. Mutual funds are investment companies regulated by the Investment Company Act of 1940. Related: open-end fund, closed-end fund.

• An investment company that pools funds from individuals to by securities to meet stated investment objectives.

• Also known as Open-End Investment Company or an Open-End Management Company. An investment company that continuously offers new equity shares in an actively managed portfolio of securities. All shareholders participate in the gains or losses of the fund. Shares are issued and redeemed as per demand, and the fund's Net Asset Value per share (NAV) is determined each day. The shares are redeemable on any business day at the Net Asset Value. Each mutual fund's portfolio is invested to match the objective stated in the prospectus. See also: Asset Allocation Fund; Balanced Fund.

• Is an investment company which the number of shares outstanding varies according to demand. If investors seek to own more shares, the fund will sell new ones. If existing shareholders seek to reduce their holdings then the fund will purchase them at the Net Asset Value. In recent years, there have been new provisions which can slow down the redemption process. It had been the case that fund shares were to be redeemed immediately on demand. This type of Investment Company is also known as an Open End Fund because the number of shares outstanding can vary widely from day-to-day. Compare to Closed End Fund.

 
 

Follow this link for all the terms related to fund.

 
 Embedded terms in definition
 Asset allocation fund
Asset allocation
Asset
Balanced fund
Basis
Closed end fund
Demand
Equity
Income
Investment company
Mutual funds
Net asset value
No load
Offer
Open end fund
Portfolio
Prospectus
Purchase
Redeemable
Redemption
Sales charge
Sales
Securities
Sell
Shareholders
Shares
Share
Type
Will
 
 Related Terms
 

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