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Mutual fund

A mutual fund is a financial intermediary that allows the investor to own a collection of stocks and/or bonds.


Expanded Definition

Mutual funds pay distributions to their shareholders. Capital gains distributions are common when a fund has a capital gain. Interest and dividends are also distributed by various funds depending on the nature of the fund.

Mutual funds have a variety of investment styles. Index fund, managed fund, growth fund, value fund, balanced fund, sector fund, gold fund, energy fund, technology fund, bond fund, closed end fund, money market fund, municipal bond fund, etc. are typical. See the prospectus or reports on services like Morningstar.com for details of a given fund.

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