Mutual Fund Definition

Learn the definition of mutual fund and other ETF terminology from the etf.com glossary.

ETF
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Reviewed by: etf.com Staff
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Edited by: etf.com Staff

Learn more about Mutual Fund

A Mutual Fund shares conceptual similarities with ETFs, representing a collective investment vehicle pooling funds from multiple investors. These funds, managed by professional portfolio managers, invest in a diversified portfolio of stocks, bonds, or other securities. Investors in Mutual Funds, like ETFs, benefit from professional management, diversification, and the potential for capital appreciation and income. The primary difference between a mutual fund and an ETF is that mutual funds are bought and sold through the fund company at the end of the trading day at the net asset value (NAV) price while ETFs are traded on stock exchanges throughout the trading day, just like individual stocks. While Mutual Funds differ structurally from ETFs, both serve as accessible and convenient options for investors seeking professionally managed, diversified investment solutions to meet their financial goals and navigate the complexities of financial markets.

Related Terms

ETF Glossary is etf.com’s collection of key terms and definitions related to exchange-traded funds. ETFs are investment funds that are traded on stock exchanges, and they can encompass a wide range of asset classes, including stocks, bonds, commodities and more. Given the diverse range of ETFs and the complexity of financial markets, having a clear understanding of ETF-related terminology is instrumental for investors looking to make informed decisions, manage risks effectively and navigate the evolving landscape of ETF investments.