Mutual Funds

About

Mutual funds are investment vehicles that pool money from multiple investors to purchase a diversified portfolio of stocks, bonds, and other securities. They are managed by professional money managers who decide which securities to buy and sell, aiming to achieve the fund's stated objectives, such as income generation or long-term growth. Mutual funds offer a convenient way to access a wide range of asset classes, providing diversification that would be difficult to achieve individually. They are typically traded once daily at the closing net asset value. Mutual funds can be either actively or passively managed. Actively managed funds strive to outperform the market, while passively managed funds, known as index funds, aim to replicate the performance of a specific market index. Mutual funds provide benefits such as professional management and low minimum investment requirements. However, they often come with fees, including operating expense ratios and potential transaction fees. Despite these costs, mutual funds remain a popular choice for many investors due to their ease of use and diversified investment options.