20-09-2017, 04:00 PM
A mutual fund is a professionally managed investment fund that pools many investors money to buy securities. Mutual funds have advantages and disadvantages compared to direct investment in individual securities. The main advantages of mutual funds are that they provide a greater level of diversification, provide liquidity and are managed by professional investors. On the downside, investors in a mutual fund must pay various fees and expenses.
The primary structures of mutual funds include publicly-traded funds, unit mutual funds and closed-end funds. Exchange traded funds (ETFs) are publicly traded funds or unit trust trusts that are traded on an exchange. Mutual funds are also classified by their major investments as money market funds, fixed income or fixed income funds, equity or equity funds, hybrid funds or others. Funds can also be classified as index funds, which are passively managed funds that coincide with the performance of an actively managed index or funds. Hedge funds are not mutual funds; hedge funds can not be sold to the general public and are subject to different government regulations.
The primary structures of mutual funds include publicly-traded funds, unit mutual funds and closed-end funds. Exchange traded funds (ETFs) are publicly traded funds or unit trust trusts that are traded on an exchange. Mutual funds are also classified by their major investments as money market funds, fixed income or fixed income funds, equity or equity funds, hybrid funds or others. Funds can also be classified as index funds, which are passively managed funds that coincide with the performance of an actively managed index or funds. Hedge funds are not mutual funds; hedge funds can not be sold to the general public and are subject to different government regulations.