What is a mutual fund?

What is a mutual fund?

Mutual fund is a collective investment method that shares benefits and risks, that is, by issuing fund units, concentrating investors’ funds, and investing in stocks, bonds, foreign exchange, currency, etc., to obtain investment income and capital appreciation. Simply put, a mutual fund pools a portion of the principal’s funds and makes purposeful investments on their behalf. Every fund company employs investment professionals to manage the fund’s portfolio, often referred to as portfolio managers. Mutual funds pool the money of a large number of investors and employees to buy stocks in various manufacturers. A combination of stocks, bonds, and other assets purchased on behalf of a group of investors and managed by a professional investment firm or other financial institution.

Features of mutual funds

1. Money market funds invest in a portfolio of high-quality securities in the money market.
2. Money market mutual funds provide a limited deposit account.
3. Money market mutual funds are subject to relatively few regulatory restrictions.

Advantages of mutual funds

1. Simple procedures, mass transactions, saving investment costs;
2. Leave the troubles to the experts and let the wealth belong to you;
3. Easy investment, legal tax saving;
4. The manager is separated from the custody, and the investment safety is guaranteed;
5. A good friend of small investors – regular fixed investment method;
6. Diversify investment risks and make big money smartly.