A mutual fund is a financial company that pools money from many investors and invests in securities such as stocks, bonds, and money market instruments. Administered by experienced money managers, mutual funds are allocated by these professionals in an attempt to generate income for investor funds. The combined assets held by the mutual fund constitute the fund’s portfolio. Investors purchase shares in mutual funds, and each share represents an investor’s part-ownership of the fund and their right to the income generated. Mutual Fund Foundation A mutual fund’s portfolio is devised and sustained to contest investment objectives set out in the prospectus while each investor participates proportionally in the gains or losses of the fund. Small investors or individuals can access these mutual funds. They avail opportunities for these small enterprises by linking them to professionally managed portfolios. The variety of assets provided includes bonds, and equity, among other securities. The value of a mutual fund is determined by the performance of the securities the fund chose to purchase; upon buying a share of a mutual fund, an investor is effectively purchasing a part of the portfolio’s value. The mutual fund’s overall performance is sketched as the shift in total capitalization of the fund. It’s derived from the constituent investment’s aggregate performance. Unlike stocks, however, investing in mutual fund shares does not bes...
