Quick Definition

A mutual fund is an investment vehicle made up of a pool of funds collected from many investors to invest in securities like stocks, bonds, money market instruments, and other assets.

Examples

• 1An investor purchases shares in a mutual fund that focuses on technology companies, gaining exposure to a diversified portfolio of tech stocks.
• 2A retiree invests in a mutual fund that primarily holds government bonds, seeking stable income with relatively low risk.
• 3A mutual fund manager reallocates funds from equities to more conservative assets like bonds in response to changing market conditions, aiming to protect investors' capital.

Tags