Mutual Fund

Mutual funds are collective investment schemes in which multiple investors pool their investments into a fund managed by a professional fund manager. By pooling investments, mutual fund holders benefit from enhanced investing power that they wouldn’t otherwise be able to access (albeit subject to fees). Mutual fund investors do not own the securities in the portfolio; they own shares in the total fund. The value of securities in the portfolio divided by the number of outstanding shares in the fund yields the fund’s price, or Net Asset Value. The daily NAV is the value of securities in the portfolio at the end of each day. Mutual funds offer investors daily liquidity. Increases in portfolio value from capital gains and payment of dividends and coupons are paid to mutual fund holders.