mutual fund

mutual fund
A fund managed by an investment company in which money is raised through the sale of stock and subsequently invested in publicly traded securities. The investment performance of the mutual fund depends on the performance of the underlying investments. Each mutual fund tends to have an investment objective such as; a growth fund strives for capital appreciation in the portfolio; an income fund looks for a stream of income over the life of the investment.
There are two general types of mutual funds; "open-end" in which capitalization is not fixed and more shares may be sold at any time, and "closed-end" in which capitalization is fixed and only the number of shares originally authorized may be sold.
See also investment company
@ closed-end funds
Mutual funds that do not repurchase their shares from investors; the shares are sold in a secondary market, such as on a stock exchange.
@ growth funds
Mutual funds that are composed of stocks of companies that are still experiencing growth; the objective is to generate an increase in investment value, with less concern about the provision of steady income
Compare with income funds, below.
@ income funds
Mutual fund consisting of securities that provide periodic dividends or coupon payments; they usually consist of coupon bonds; they are designed to provide investors with a stable income
Compare with growth funds, above.
@ index fund
A mutual fund whose portfolio is designed to match the performance of a broad-based index such as Standard & Poor's Index and whose performance therefore mirrors the market as reflected by the index.
@ load fund
Mutual fund in which a charge (load) is made at time of purchase of shares to cover administrative and commission expenses
See also load
- mutual fund
@ money market funds
Mutual fund that invests in money market securities.
@ no-load fund
A mutual fund that has no service charge (load) for buying its shares.
+ no-load fund
A type of mutual fund which charges little or nothing for administrative and selling expenses in the sale of its shares.
See mutual fund
@ open-end funds
Mutual funds that are willing to repurchase their shares from investors at any time
@

Black's law dictionary. . 1990.

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