mutual fund

What is the opposite of mutual fund? Here is what we hold, with its meaning and related words.

Noun — An investment company that gathers money from many investors and puts it into a shared portfolio of shares, bonds or other assets; each investor owns units of the whole pool rather than any particular holding in it. Chiefly North American; the nearest British equivalents are the unit trust and the open-ended investment company.

How to use mutual fund

The word patterns that sound natural to a native speaker.

invest in a mutual fund mutual fund shares actively managed mutual fund money market mutual fund

The standard term in the United States and Canada; in the UK, unit trust or fund is more usual and mutual fund may be read as an Americanism.

Etymology

From mutual, in the sense of jointly owned by its members, plus fund.

Full origin of mutual fund →

Frequently asked questions

What is the difference between a mutual fund and an ETF?

Both are pooled funds holding a basket of assets, but they are bought differently. Mutual fund units are bought from and sold back to the fund itself, priced once a day after markets close. An ETF trades on a stock exchange throughout the day at whatever price buyers and sellers agree, like an ordinary share.

What is the difference between a mutual fund and an index fund?

They are not opposites. Index fund describes a strategy — tracking a published market index rather than picking holdings — while mutual fund describes a legal structure. A fund can be both: many index funds are mutual funds, and many mutual funds are actively managed instead.

How do mutual funds make money for the fund company?

Funds charge fees, usually a yearly percentage of the money invested, and sometimes a charge on buying or selling units. These costs are taken out of the fund, so the return an investor sees is after the fees have been deducted.

Nearby words

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