WHAT IS A MUTUAL FUND?

A mutual fund is an investment vehicle that is made up of capital from many investors for the purpose of investing in a basket of securities, such as stocks, bonds, money markets, and other assets. Mutual funds are actively managed by fund managers who invest the fund’s capital and decide what assets to hold in an attempt to produce income for the fund’s investors. A mutual fund’s portfolio is structured and maintained to match the investment objectives stated in its prospectus.

If you own shares in a mutual fund, you do not own the underlying stocks, bonds, and other assets. You own shares in the mutual fund itself. If you want to buy or sell shares of the fund, you put in an order, and it is executed at the close of business based on its net asset value (NAV), which is calculated at the end of every day.