Glossary · from the DESK dictionary
Mutual Fund
A pooled investment vehicle that gathers capital from many investors and invests it in a diversified securities portfolio.
In plain words
Many investors pool their money, and a fund manager invests it collectively.
In more detail
Unlike ETFs, mutual funds usually trade only once a day at net asset value (NAV), not continuously throughout the trading day. Actively managed funds typically charge higher fees than passive ETFs.
Example
An investor buys shares of a globally investing equity fund instead of individual stocks.
What it means for traders
A classic vehicle for diversified, professionally managed investing, especially common in retirement savings.
Common pitfalls
Actively managed funds historically mostly fail to consistently beat their benchmark, despite higher fees.
Related terms
Active Management · Asset Manager · Equity Fund · ETF (Exchange-Traded Fund) · Expense Ratio (TER) · Fund of Funds
From the DESK dictionary. For information only, not investment advice.
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DESK is a research tool and not investment advice. Page generated: 2026-10-12.