noun

mutual fund

MYOO-choo-uhl fund

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Mutual fund (noun) means 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. Example: “Most of her retirement savings sit in two low-cost mutual funds.”

noun

finance, chiefly North American 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.

"Most of her retirement savings sit in two low-cost mutual funds."

"The mutual fund holds shares in more than 500 companies."

How to use mutual fund

Learner’s notes

In plain EnglishA big shared pot of money invested in lots of things at once, with many people owning a slice.

When to use it

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.

Memory tip

Note the structure, not the strategy: mutual fund says how the fund is organised, not what it buys.

Trace the full origin ↓

Easily confused with

ETF → index fund → hedge fund → unit trust investment trust

Common pairings

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

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C2 · Advanced serendipity Fortunate discoveries made entirely by accident.

Gen Z slang rizz Charm — the ability to attract a romantic interest.

B2 · Intermediate empathy The capacity to share another person’s feelings.

C1 · Advanced nonchalant Casually calm and relaxed; unconcerned.

Internet slang delulu Delusional — believing something against the odds.

Etymology nostalgia Greek nostos “return home” + algos “pain”.

C2 · Advanced serendipity Fortunate discoveries made entirely by accident.

Gen Z slang rizz Charm — the ability to attract a romantic interest.

B2 · Intermediate empathy The capacity to share another person’s feelings.

C1 · Advanced nonchalant Casually calm and relaxed; unconcerned.

Internet slang delulu Delusional — believing something against the odds.

Etymology nostalgia Greek nostos “return home” + algos “pain”.

Test yourself on “mutual fund” A quick quiz — meaning, synonyms & usage →

Fill the gap

Can you complete this real example?

Most of her retirement savings sit in two low-cost _____.

Etymology

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

Origin: English

Synonyms

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unit trust open-ended fund collective investment scheme pooled fund OEIC

Related words

ETF

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.

What is the meaning of mutual fund?

"mutual fund" (noun) means 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.

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