What Is A Mutual Fund?

Written by admin on July 28, 2009 – 12:16 pm

What is a mutual fund? A mutual fund is a pool of money that is contributed by many smaller investors (and some large investors) to create one assets that is managed by a broker or mutual fund manager. Mutual funds can have thousands of investors. The mutual fund manager makes the decision as to where the pool of money will be invested on behalf of the many different contributor of the mutual fund. Mutual funds typically invest in several different types of investments, they also have guidelines as to which investments they make. Mutual funds are graded by benchmarks. Mutual fund benchmarks are often compared to other stock index — like the S&P 500.

When investing in a mutual fund you purchase shares. The benefits of investing in a mutual fund are:

When you purchase shares in a mutual fund you are automatically diversifying your portfolio
You can enter the stock market at a lower price point when you invest in a mutual fund
Mutual Funds are managed by a personal financial experts

Mutual Funds Explained in Simple Dollar Terms

http://www.youtube.com/watch?v=ky7GWCksyRg

However, mutual funds are not FDIC insured.

What Is a No Load Mutual Fund?

What is a No load mutual fund? A no-load mutual fund is a fund shares sold without a commission or sales charge associated. No load mutual funds are sold directly to the investor vs. sold through a second party. When a loaded fund shares are sold or purchased there is a commission charge.

What Is A Socially Conscious Mutual Fund?

What is a socially conscious mutual fund? A socially conscious mutual fund is a fund that is environmentally conscious. Here is a list of 12 socially conscious mutual funds:

12 Socially Conscious Mutual Funds