Find out how mutual funds work
Get to grips with one of the most common investment vehicles
Investment used to be reserved for those with high capital. Now, investors with lower incomes can get in on the action, pooling funds together to create a mutual fund.
What is a mutual fund?
A mutual fund sees a professional, or group of professionals, manage investments on behalf of other people. This service comes at a cost. The aim is for the management of the fund to outperform or ‘beat’ the market, resulting in higher returns for investors.
Typically, a fund manager will invest money in a diverse portfolio of holdings in an attempt to generate growth on the investment.
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