What are Mutual Funds and how do they work?
Mutual Funds are an investment tool that allows investors to diversify their investment portfolio.
This means that a fund is made up of several different assets, such as company stocks, government bonds or corporate bonds.
The investor buys units of the fund and the money is invested in the aforementioned assets.
How Mutual Funds Work
Mutual funds are a form of investment, which combines the capital of many investors in order to purchase financial assets such as stocks, bonds, etc.
This allows investors to obtain a better return by investing smaller amounts.
This kind of fund is managed through a professional account manager, who will select the most profitable assets for investors.
Mutual Funds offer the possibility to diversify the investment portfolio usually through a single transaction for the buyer.
The process is the same as in any other investment: first you have to choose the type of fund you want to purchase and then you make a subscription.
After this, the fund manager will make use of the money collected to buy the financial assets previously chosen.
The price of the mutual fund units is determined by the amount of assets contained in the fund's portfolio.
These units are listed on the stock exchange and prices may vary daily.
