Mutual funds Meaning and Definition
Mutual funds
Pronunciation
/ˈmjuːtʃuəl ˈfʌndz/
Part of Speech
Noun
Definition
A type of investment vehicle that pools money from many investors to invest in a variety of assets, such as stocks, bonds, and other securities, with the goal of generating income and long-term growth.
Examples
- The investor chose to put her money into a mutual fund to diversify her portfolio.
- Mutual funds are popular among retirees who want a steady income stream.
Synonyms
- Investment fund
- Portfolio
Antonyms
- High-risk investment
- Speculative investment
Etymology
The term “mutual fund” originated in the United States in the 1920s, derived from the concept of mutual ownership and the pooling of resources among investors.
Usage Notes
Mutual funds can be used as a way to invest in a variety of assets, such as stocks, bonds, and real estate, and can be a good option for investors who want to diversify their portfolio.
Cultural References
Mutual funds have been referenced in popular culture, such as in the movie “The Wolf of Wall Street,” which features a character who makes a fortune investing in mutual funds.
Idiomatic Expressions or Phrases
“Diversify your portfolio” is an idiomatic expression that refers to the practice of investing in a variety of assets, such as mutual funds, to reduce risk.
Related Words or Phrases
Other related words or phrases include “investment portfolio,” “stock market,” and “financial advisor.”
Collocations
Common collocations with the term “mutual funds” include “invest in,” “diversify,” and “generate income.”
Frequency of Use
The term “mutual funds” is commonly used in financial and investment contexts, and is often referenced in news articles and financial reports.
Common Misspellings
Common misspellings of the term “mutual funds” include “mutual fund” (without the “s”) and “mutual investment” (which is not a correct term).
Additional Information
Mutual funds are often managed by professional investment managers who use a variety of strategies to generate returns for investors. They can be a good option for investors who want to invest in a variety of assets and reduce their risk. However, mutual funds can also come with fees and expenses, which can eat into returns. It’s essential to do your research and choose a mutual fund that aligns with your investment goals and risk tolerance.
Mutual funds can be classified into different types, such as equity funds, debt funds, and hybrid funds. Equity funds invest in stocks, debt funds invest in bonds and other fixed-income securities, and hybrid funds invest in a combination of stocks and bonds. Each type of mutual fund has its own set of characteristics and risks, and investors should carefully consider these factors before investing.
Mutual funds can be bought and sold through various channels, such as online brokerages, financial advisors, and mutual fund companies. Investors can also use online platforms to research and compare different mutual funds before making a decision.