Mutual Funds
A practical, cost-efficient way to build a diversified investment portfolio
The Basics
Mutual funds pool investor money and buy a portfolio of stocks, bonds and other investments
Mutual funds make it easier for individuals to invest in many opportunities rather than just a few. The combined holdings of the mutual fund are known as its portfolio. Each share bought represents an investor’s part ownership in the mutual fund and in the gains it generates.
There are many types of mutual funds, each with different features, risks and rewards. Typically, they specialize in an asset class, industry or theme, for example investing in such things as real estate, infrastructure or renewable energy.
Features
Potential benefits and key features of mutual funds include:
Professional, active management
Fund managers research and select which securities to buy and then monitor performance
Diversification
Typically invested in a range of companies and industries, helping lower single-stock risk