Definition
A mutual fund is a professionally managed investment vehicle that pools money from multiple investors to purchase a diversified portfolio of stocks, bonds, or other securities. Mutual funds are priced once daily at net asset value (NAV) and can be actively or passively managed. Active funds aim to outperform benchmarks; passive funds track indexes. Mutual funds charge expense ratios and may have loads (sales charges). While offering diversification and professional management, mutual funds have lost market share to lower-cost ETFs.
Formula
Example
A actively managed growth mutual fund with 100 stocks might have a 1% expense ratio. If it returns 10% but the S&P 500 returns 11%, the active management didn't add value after fees.
FAQ
What is Mutual Fund?
A professionally managed investment fund that pools money from many investors.
How do you calculate Mutual Fund?
A common formula for Mutual Fund is: NAV = (基金总资产 - 负债) / 流通份额; 总回报 = (期末NAV - 期初NAV + 分配) / 期初NAV
Why is Mutual Fund important?
Mutual Fund helps investors evaluate industry terms and make more informed decisions.