← Glossary
Mutual fund
A fund you buy from and sell back to the fund company, usually once a day at that day's price.
A mutual fund pools investors' money like any fund, but its units are not traded on an exchange. You buy them from the fund company and sell them back to it, and in the United States every order received before the day's cut-off is filled at one price worked out after the market closes — the value of the fund's assets divided by its units.
A mutual fund can follow an index or be actively managed. An ETF does the same job but trades on an exchange during the day.