A mutual fund is a pool of securities (stocks, bonds, money market instruments, etc.) managed by an investment company or other professional and paid for by investors. Each share of a mutual fund contains a small piece of every different type of security in the fund (so when you buy a share of a mutual fund, you’re really buying a little piece of a stock from Company A, a little piece of a stock from Company B, a little piece of a government bond, and so on).

Tags: funds, mutual fund