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What is a Mutual Fund?
A mutual fund is a pool of investors' money invested by a professional money manager in securities markets based on the objectives of the mutual fund as stated in its prospectus. Each mutual fund is managed according to a set of defined objectives, allowing investors the freedom to choose a fund which is consistent with their personal goals. Professional fund managers use the pooled investors money to buy different types of securities (generally stocks and bonds). Due to the large size of mutual funds, managers have access to securities not available to individual investors. Size also allows for greater diversification of securities - an important benefit to the investors. Mutual funds allow investors to invest in the world security markets without the day to day need to manage their own investments - this is the job of the fund manager.
Mutual Funds Offer:
- Professional money management - Your money is invested by experts
- Diversification - Your money is spread across many different investments
- Flexibility - Mutual funds can be bought and sold on any business day
- Choice - You can choose from a wide variety of funds
- Liquidity – Mutual Funds can be easily liquidated
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