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What is a Mutual Fund ?

A mutual fund is a collection of shares or other securities owned by a group of investors and managed by a professional investment company. A fund earns money from interest and dividends received out of investments made in shares and also from selling the purchased shares for a profit.

The profits are distributed to the investors who contributed to the fund.

Funds are either Open-Ended or Closed-Ended. Open-Ended Funds accept new money from investors and will keep growing. Closed-Ended funds accept money only once to create the fund and from that point on the fund works like stocks.

Funds are usually based on specific concepts like Income, Growth etc.


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