← Back to Education CenterProfessionally managed pooled investments
Understanding Mutual Funds
A mutual fund pools money from many investors and invests in a portfolio of securities. Different funds pursue different objectives and levels of risk.
01
Why investors use them
Mutual funds can provide professional management, diversification, affordability, and liquidity. They can hold many securities rather than requiring an investor to purchase each holding separately.
02
Risk still matters
Mutual funds are not guaranteed. Values fluctuate, fees and expenses apply, and shares can be worth more or less than the original investment when sold.
03
Match the fund to the goal
Time horizon, risk tolerance, investment objective, fees, and the role of the fund within the overall portfolio should be considered before investing.