Term of the Day mutual fund An investment vehicle managed by finance professionals that raises capital by selling shares (called units) in a chosen and balanced set of securities to the public.A mutual fund's capital is invested in a group (portfolio) of corporate securities, commodities, options, etc., that match the fund's objectives detailedin its prospectus. The level of a mutual fund's income from its portfolio determines the daily market value (called net asset value) at which its units are redeemable on any business day, and the dividend paid to its unit holders. Mutual funds are of two main types: (1) open end fund, where the capitalizationof the fund is not fixed and more units may be sold at any time to increase its capital base, (2) closed end fund, where ... Learn more about this term Usage Example A mutual fund can be advantageous for a small investor because it is professionally managed and can include a diversified portfolio.

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