What is a Mutual Fund?

What is a Mutual Fund?

I have here two sources of the meaning of a Mutual Fund.  May this could help you understand better about Mutual Funds.  May this be a guide for your future investment to Mutual Funds.

A Mutual Fund is an investment company that pools the funds of many individual and institutional investors to form a massive asset base.   The assets are then entrusted to a full time professional fund manager who develops and maintains a diversified portfolio of security investments.  People who buy shares of a mutual fund are its owners or shareholders.  Their purchases provide the money for a mutual fund to buy securities such as stocks and bonds.  A mutual can make money from its securities investments in two ways: a security can pay dividends and interest to the fund, or a security  can rise in value.  The fund passes any dividends, interest or profits on the sale of its portfolio securities, less fund expenses, to shareholders in the form of distributions.

Source: http://icap.com.ph/mf_101.html

A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities.[1]  The mutual fund will have a fund manager that trades the pooled money on a regular basis. The net proceeds or losses are then typically distributed to the investors annually.

Source: http://en.wikipedia.org/wiki/Mutual_fund