Mutual Funds
A mutual fund is generally set up as a trust or corporation and allows a group of investors to pool their money together. Each mutual fund has a prospectus that outlines the details of the fund and its investment objective. Mutual funds have a manager who is responsible for investment selection. As an investor in a mutual fund, your return is based on the underlying investments selected by the fund manager. Benefits of mutual funds include diversification, access to professional money managers, liquidity and convenience. Mutual funds have annual fees and service fees that are commonly referred to as the Management Expense Ratio (MER).
