Mutual fund

A company that is owned by its members. Building societies and friendly societies are mutuals as are some insurance companies. Also known as unit trusts in the United Kingdom. A mutual fund is a financial structure through which investors pool their funds to invest in a diversified portfolio of securities. The fund is operated by an investment company that raises money from shareholders and invests in a group of assets, in accordance with a stated set of objectives. The selection of assets is made by professional fund managers. Mutual funds may generally fall under the classification of "open-ended funds" that sell and redeem shares at any time directly to shareholders.