mutual fund

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mutual fund,

in finance, investment company or trust that has a very fluid capital stock. It is unique in that at any time it can sell or redeem any of its outstanding shares at net asset value (i.e., the price of a share equals total assets minus liabilities divided by the total number of shares). A mutual fund, also called an open-end investment company, owns the securities of several corporations and receives dividends on the shares that it holds. A closed-end investment company differs from an open-end company in that the number of shares is limited and the price of the shares may fluctuate above and below the net asset value. The earnings of a mutual fund are distributed to the holders of its shares. It is hoped that a loss on one holding will be made up by a gain on another. The holders of mutual-fund shares thus gain the advantage of diversification, which might ordinarily be beyond their means. Common mutual funds, which often provide skilled management for security holdings, include stock, bond, balanced, index, and money-market fundsmoney-market fund,
type of mutual fund that invests in high-yielding, short-term money-market instruments, such as U.S. government securities, commercial paper, and certificates of deposit. Returns of money-market funds usually parallel the movement of short-term interest rates.
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. Stock funds mainly invest in common shares, and bond funds in bonds; such funds may specialize in a particular category of stocks or bonds (such as Internet stocks or municipal bonds). A balanced fund might invest in preferred stocks and bonds in addition to common stocks. Index funds invest in a portfolio that mimics a given index, such as the stocks that make up the S&P 500. The forerunner of the modern mutual fund was established in Belgium in 1822, and the use of these closed-end investment companies soon spread to Great Britain and France. They became popular in the United States in the 1920s, but from the 1930s the open-end mutual fund became more popular. Mutual funds experienced a period of tremendous growth after World War II, especially in the 1980s and 90s.

Bibliography

See M. Useem, Investor Capitalism: How Money Managers Are Changing the Face of Corporate America (1996).

References in periodicals archive ?
It was unit trusts (or mutual funds as it is called in the US) that gave birth to variable contracts.
The Best Unit Trust award recognizes fund management companies that give priority to unit holder interest, promote better compliance and transparency, encourage adoption of best practices in asset management and deliver competitive risk adjusted returns to clients.
Until August 31, 2019, Standard Chartered Securities will be conducting a wealth promotion that offers guaranteed rewards for clients who invest and accumulate a minimum of BND10,000 in Unit Trusts, BND100,000 in bonds or sign up for Smart Saver Plan with a minimum monthly contribution of BND200, the report added.
She said share prices generally rose in a healthy economy, and that in an ailing economy, prices would fall and subsequently so would be the prices of units in a unit trust.
"Any unit trust fund which falls below the minimum eligibility score will be suspended and will not be offered during the period," Mohamad Nasir said.
Incapital and Nuveen Asset Management have announced the launch of an equity unit trust based on the 2015 predictions of Nuveen's Bob Doll.
QMY financial adviser has recommended some investments that I have not heard of before, such as unit trusts. Are unit trusts right for me?
Now the question becomes whether all this gain is taxed as an excess distribution as if the unit trust shares were PFIC stock from the date of acquisition.Under the excess distribution rules, once the excess distribution gain has been determined, it is allocated ratably to all the days in the investor's holding period, in this case, Jan.
We recognise REITs as an important investment asset class and we are positive that the unit trust structure would facilitate the establishment of a variety of innovative products, utilising the Financial Trust Law of Bahrain in addition to the current CIU regulations."
Q: After I was left money by a relative, I invested in unit trusts. One day though, I will have to cash in my units.