UNDERSTANDING MUTUAL FUND INVESTING

Part 1

UNDERSTANDING MUTUAL FUND INVESTING


A mutual fund is an investment vehicle that pools together the funds of various investors---both individuals and corporations. The pool of funds is managed by a professional fund manager who uses the funds to create a diversified investment portfolio consisting of various investment instruments such as stocks and bonds.

Mutual Fund Quick Facts
o It pools the money of people, with the same investment objectives, through the issuance of shares.
o The resulting size of the fund allows it to invest in a basket of securities.
o It is managed by full-time professionals.
o Investors in a mutual fund are considered part owners or shareholders of the fund.
o Shareholders are entitled to a proportionate share in investment income and risk exposure.
o Each share represents a proportionate ownership in all the fund’s underlying securities
o Earnings in a mutual fund are based on Net Asset Value Per Share (NAVPS)


courtesy of http://www.philequity.net/investorEducation.php