mutual fund

A mutual fund (also called a pooled investment fund) is a collective investment vehicle that pools money from multiple investors to invest in a diversified portfolio of assets, such as stocks, bonds, or other financial instruments. Managed by a professional, it offers diversification to reduce risk and liquidity, allowing investors to buy or sell shares at their net asset value at any time. However, mutual funds typically have significantly higher management fees than Exchange-Traded Funds (ETFs), which can impact the net return for investors.