Funds
Mutual Fund
A pooled investment vehicle priced once per day at net asset value, managed actively or passively by a fund company.
Example
A mutual fund investing $500 million across 200 stocks lets an individual investor buy one share of the fund to get proportional exposure to all 200 holdings at once.
Common Misconception
Unlike stocks and ETFs, mutual funds don't trade throughout the day — orders placed during market hours all execute at a single price calculated after the market closes, the fund's net asset value.
Why It Matters
Actively managed mutual funds typically charge higher expense ratios than index funds or ETFs, so it's worth checking whether a fund's historical performance has actually justified its extra cost.