Investing Basics

What Is a Mutual Fund?

A mutual fund is an investment vehicle that pools money from many investors to buy a portfolio of securities, such as stocks or bonds, managed according to a stated objective. Investors own shares of the fund, which are bought and sold at the net asset value (NAV) calculated once at the end of each trading day.

Costs

Funds charge an annual expense ratio and may have sales charges (loads) or other fees, all disclosed in the prospectus.

Mutual Fund vs. ETF

ETFs trade on exchanges throughout the day at market prices; mutual funds are priced once daily.

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🔗 Related Terms

Exchange-Traded Fund (ETF) Index Fund Expense Ratio Diversification

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Last updated: September 27, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.