Mutual Fund

A fund managed by an investment company that raises money from shareholders and invests it in stocks, bonds, real estate, money market securities, commodities, or options. Mutual funds offer investors the benefits of professional management and diversification, for which they charge a management fee. Some mutual funds charge a sales fee (load). Mutual funds are sold by prospectus, which contains complete information on the fund’s investment objectives, the risks involved, and any fees and expenses associated with the fund. The prospectus should always be read carefully before investing.