Science and Technology Study Material
A mutual fund company is an investment company that receives money from investors for the sole purpose to invest in stocks, bonds, andother securities for the benefit of the investors. A mutual fund is the portfolio of stocks, bonds, or other securities that generate profits for the investor, or shareholder of the mutual fund. A mutual fund allows an investorwith less money to diversify his holdings for greater safety and to benefit from the expertise of professional fund managers. Mutual funds are generally safer, but less profitable, than stocks, and riskier, but more profitable than bonds or bank accounts, although its profit-risk profile can vary widely, depending on the fund's investment objective.Most mutual funds are open-end funds, which sells new shares continuously or buys them back from the shareholder (redeems them), dealing directly with the investor (no-load funds) or through broker-dealers, who receive the sales load of a buy or sell order. The purchase price is the net asset value (NAV) at the end of the trading day, which is the total assets ofthe fund minus its liabilities divided by the number of shares outstanding for that day.
