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Investing & the Stock Market vocabulary · Funds & ETFs

Mutual fund

Meaning in investing & the stock market, with examples

/ˈmjuːtʃuəl fʌnd/nounCore term

In investing & the stock market, mutual fund means: A fund that collects money from many investors and uses it to buy a mix of shares, bonds or other assets, managed by professionals and priced once a day.

In Turkish: yatırım fonu, fon

How it is used

The American term; British texts often say 'unit trust' or 'fund'. Investors buy units or shares in a mutual fund, and the price is the net asset value calculated after the market closes. Fund documents describe the strategy, fees and risks.

Example sentences

  1. Most of her retirement savings are in a balanced mutual fund.

  2. Mutual fund orders placed after the cut-off time are executed at the next day's price.

Common collocations

  • invest in a mutual fund
  • mutual fund manager
  • equity mutual fund
  • mutual fund units
  • ETFShort for exchange-traded fund: a fund that holds a basket of assets, often following an index, and whose units are bought and sold on a stock exchange like shares.
  • net asset valueThe value of a fund's assets minus its liabilities, usually divided by the number of units to give the price of one unit of the fund.
  • expense ratioThe yearly cost of running a fund, shown as a percentage of the money invested in it. It is taken from the fund's assets, so it reduces investors' returns.
  • index fundA fund that aims to match the performance of a market index by holding the same securities in the same proportions, instead of trying to beat it.
  • hedge fundA privately managed investment fund for wealthy or professional investors that can use flexible strategies such as short selling, leverage and derivatives.

More terms: Funds & ETFs

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This page explains English vocabulary for learners. It is not financial advice.