Mutual fund

mutual fundsfundmutualfundsmutual fund managermutual fund market mutual fund managerforeign fundingmutual fund sharesmutual-fund
A mutual fund is a professionally managed investment fund that pools money from many investors to purchase securities.wikipedia
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Investment fund

collective investment schemeinvestment fundsinvestment vehicle
A mutual fund is a professionally managed investment fund that pools money from many investors to purchase securities.
An investment fund may be held by the public, such as a mutual fund, exchange-traded fund, special-purpose acquisition company or closed-end fund, or it may be sold only in a private placement, such as a hedge fund or private equity fund.

Security (finance)

securitiessecuritydebt securities
A mutual fund is a professionally managed investment fund that pools money from many investors to purchase securities.
They include shares of corporate stock or mutual funds, bonds issued by corporations or governmental agencies, stock options or other options, limited partnership units, and various other formal investment instruments that are negotiable and fungible.

Index fund

Indexindex investingindex funds
Funds may also be categorized as index funds, which are passively managed funds that match the performance of an index, or actively managed funds. The first retail index fund, First Index Investment Trust, was formed in 1976 by The Vanguard Group, headed by John Bogle; it is now called the "Vanguard 500 Index Fund" and is one of the world's largest mutual funds.
An index fund (also index tracker) is a mutual fund or exchange-traded fund (ETF) designed to follow certain preset rules so that the fund can track a specified basket of underlying investments.

Closed-end fund

closed-endclosed-endedclosed end funds
Primary structures of mutual funds include open-end funds, unit investment trusts, and closed-end funds.
Instead, the shares can be purchased and sold only in the market, which is the original design of the mutual fund, which predates open-end mutual funds but offers the same actively-managed pooled investments.

Hedge fund

hedge fundshedge fund managerhedge-fund
Hedge funds are not mutual funds; hedge funds cannot be sold to the general public and are subject to different government regulations.
Hedge funds are generally distinct from mutual funds, as their use of leverage is not capped by regulators, and distinct from private equity funds, as the majority of hedge funds invest in relatively liquid assets.

Open-end fund

open-endedopen-endopen-ended funds
Primary structures of mutual funds include open-end funds, unit investment trusts, and closed-end funds.
US mutual funds, UK unit trusts and OEICs, European SICAVs, and hedge funds are all examples of open-ended funds.

Exchange-traded fund

ETFETFsexchange-traded funds
Exchange-traded funds (ETFs) are open-end funds or unit investment trusts that trade on an exchange.
An ETF combines the valuation feature of a mutual fund or unit investment trust, which can be bought or sold at the end of each trading day for its net asset value, with the tradability feature of a closed-end fund, which trades throughout the trading day at prices that may be more or less than its net asset value.

Net asset value

NAVNet Asset Value (NAV)book value
Early U.S. funds were generally closed-end funds with a fixed number of shares that often traded at prices above the portfolio net asset value.
Net asset value (NAV) is the value of an entity's assets minus the value of its liabilities, often in relation to open-end or mutual funds, since shares of such funds registered with the U.S. Securities and Exchange Commission are redeemed at their net asset value.

The Vanguard Group

VanguardVanguard GroupBill McNabb
The first retail index fund, First Index Investment Trust, was formed in 1976 by The Vanguard Group, headed by John Bogle; it is now called the "Vanguard 500 Index Fund" and is one of the world's largest mutual funds.
It is the largest provider of mutual funds and the second-largest provider of exchange-traded funds (ETFs) in the world after BlackRock's iShares.

Unit investment trust

UITsunit trustsunit-investment trusts
Primary structures of mutual funds include open-end funds, unit investment trusts, and closed-end funds.
Unlike a mutual fund, a UIT is created for a specific length of time and is a fixed portfolio: its securities will not be sold or new ones bought except in certain limited situations (for instance, when a company is filing for bankruptcy or the sale is required because of a merger).

MFS Investment Management

MFSMassachusetts Financial ServicesMassachusetts Financial Services Company
The first open-end mutual fund with redeemable shares was established on March 21, 1924 as the Massachusetts Investors Trust (it is still in existence today and is now managed by MFS Investment Management).
Founded in 1924, MFS is one of the oldest asset management companies in the world and has been credited with pioneering the mutual fund.

Prospectus (finance)

prospectusdisclosureconcept note
The Securities Act of 1933 requires that all investments sold to the public, including mutual funds, be registered with the SEC and that they provide prospective investors with a prospectus that discloses essential facts about the investment.
It commonly provides investors with material information about mutual funds, stocks, bonds and other investments, such as a description of the company's business, financial statements, biographies of officers and directors, detailed information about their compensation, any litigation that is taking place, a list of material properties and any other material information.

Late trading

after hours
Some fund management companies allowed favored investors to engage in late trading, which is illegal, or market timing, which is a practice prohibited by fund policy.
In the mutual fund context, late trading involves placing orders for mutual fund shares after the close of the stock market, 4:00 p.m for the New York Stock Exchange, but still getting that day's closing price, rather than the next day's opening price.

Market timing

buy low and sell highmarket timetime the market
Some fund management companies allowed favored investors to engage in late trading, which is illegal, or market timing, which is a practice prohibited by fund policy.
They argue that "attempting to predict future market price movements" is what all traders do, regardless of whether they trade individual stocks or collections of stocks, aka, mutual funds.

Target date fund

target date asset allocation investment fundLifecycle Fundstarget date funds
2) New product introductions (including funds based on municipal bonds, various industry sectors, international funds, and target date funds) and
A target date fund (TDF) – also known as a lifecycle, dynamic-risk or age-based fund – is a collective investment scheme, often a mutual fund or a collective trust fund, designed to provide a simple investment solution through a portfolio whose asset allocation mix becomes more conservative as the target date (usually retirement) approaches.

Investment Company Act of 1940

1940 Act1940 Act fund1940 Act funds
The Investment Company Act of 1940 established rules specifically governing mutual funds.
Following the founding of the mutual fund in 1924, investors welcomed the innovation with open arms and invested in this new investment vehicle heavily.

John C. Bogle

BogleEGS DesignJack Bogle
The first retail index fund, First Index Investment Trust, was formed in 1976 by The Vanguard Group, headed by John Bogle; it is now called the "Vanguard 500 Index Fund" and is one of the world's largest mutual funds.
Bogle is known for his insistence, in numerous media appearances and in writing, on the superiority of index funds over traditional actively managed mutual funds.

Defined contribution plan

defined contributioncontributedefined contribution pension plan
3) Wider distribution of fund shares, including through employee-directed retirement accounts such as 401(k), other defined contribution plans and individual retirement accounts (IRAs.) Among the new distribution channels were retirement plans. Mutual funds are now the preferred investment option in certain types of fast-growing retirement plans, specifically in 401(k), other defined contribution plans and in individual retirement accounts (IRAs), all of which surged in popularity in the 1980s.
This may range from choosing one of a small number of pre-determined mutual funds to selecting individual stocks or other securities.

National Securities Markets Improvement Act of 1996

NM
The National Securities Markets Improvement Act of 1996 gave rulemaking authority to the federal government, preempting state regulators. However, states continue to have authority to investigate and prosecute fraud involving mutual funds.
The National Securities Markets Improvement Act of 1996 is an amendment to United States federal securities laws in order to promote efficiency and capital formation in the financial markets, and to amend the Investment Company Act of 1940 to promote more efficient management of mutual funds, protect investors, and provide more effective and less burdensome regulation between states and the Federal Government.

Fund of funds

fund of hedge fundsfunds of fundsfund-of-funds
Hybrid funds may be structured as funds of funds, meaning that they invest by buying shares in other mutual funds that invest in securities.
There are different types of FOF, each investing in a different type of collective investment scheme (typically one type per FOF), for example a mutual fund FOF, a hedge fund FOF, a private equity FOF, or an investment trust FOF.

Custodian bank

custodiancustodycustodians
Custody fee: paid to a custodian bank for holding the fund's portfolio in safekeeping and collecting income owed on the securities
Assets held in such a manner are typically owned by larger institutional firms with a considerable number of investments such as banks, insurance companies, mutual funds, hedge funds and pension funds.

Mutual fund fees and expenses

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On the negative side, investors in a mutual fund must pay various fees and expenses.
Mutual fund fees and expenses are charges that may be incurred by investors who hold mutual funds.

List of mutual-fund families in the United States

familyfamily of fundsU.S. mutual funds
List of mutual-fund families in the United States
The following is a limited list of mutual-fund families in the United States. A family of mutual funds is a group of funds that are marketed under one or more brand names, usually having the same distributor (the company which handles selling and redeeming shares of the fund in transactions with investors), and investment advisor (which is usually a corporate cousin of the distributor).

Money market fund

money fundmoney market fundsmoney market mutual funds
Mutual funds are also classified by their principal investments as money market funds, bond or fixed income funds, stock or equity funds, hybrid funds or other.
A money market fund (also called a money market mutual fund) is an open-ended mutual fund that invests in short-term debt securities such as US Treasury bills and commercial paper.

Mutual funds in India

Distribution of Mutual FundsMutual FundsMutual Funds Sahi hai!
Mutual funds in India
The first introduction of a mutual fund in India occurred in 1963, when the Government of India launched Unit Trust of India (UTI).