Investment Fund


DEFINITION of 'Investment Fund'

A supply of capital belonging to numerous investors that is used to collectively purchase securities while each investor retains ownership and control of his or her own shares. An investment fund provides a broader selection of investment opportunities, greater management expertise and lower investment fees than investors might be able to obtain on their own. Types of investment funds include mutual funds, exchange traded funds, money market funds and hedge funds.

BREAKING DOWN 'Investment Fund'

Individual investors do not make decisions about how a fund's assets should be invested. They simply choose which fund to invest in based on its goals, risk, fees and other factors. A fund manager actually oversees the fund and decides which securities it should hold, in what quantities and when they should be bought and sold. An investment fund can be broad-based, such as an index fund that tracks the S&P 500, or it can be tightly focused, such as an ETF that invests only in small technology stocks.

  1. Exchange-Traded Fund (ETF)

    A security that tracks an index, a commodity or a basket of assets ...
  2. Hedge Fund

    An aggressively managed portfolio of investments that uses leveraged, ...
  3. Strategic Investment Fund

    The Strategic Investment Fund is a government-owned sovereign ...
  4. Fund Manager

    The person(s) resposible for implementing a fund's investing ...
  5. Collective Investment Fund

    A fund that is operated by a trust company or a bank and handles ...
  6. Index Fund

    An index fund is a type of mutual fund with a portfolio constructed ...
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  1. Why are mutual funds subject to market risk?

    Like all securities, mutual funds are subject to market, or systematic, risk. This is because there is no way to predict ... Read Full Answer >>
  2. Does Fidelity have mutual funds?

    Fidelity offers clients all asset classes of mutual funds, ranging from domestic equity to specialized sectors. The offering ... Read Full Answer >>
  3. How often are mutual fund prices updated?

    A mutual fund's price, or its net asset value (NAV), is determined once a day after the markets close at 4 p.m. Eastern time ... Read Full Answer >>
  4. Can minors invest in mutual funds?

    A mutual fund can be opened under the name of a minor through a custodial account overseen by a guardian. The custodian holds ... Read Full Answer >>
  5. Can mutual funds only hold stocks?

    There are some types of mutual funds, called stock funds or equity funds, which hold only stocks. However, there are a number ... Read Full Answer >>
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    The magic of compound interest can be summed up as the concept of interest making interest. On the other hand, simple interest ... Read Full Answer >>

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