Definition: Mutual fund shares

Category: External debt - IMF

Mutual funds are financial institutions through which investors pool their funds to invest in a diversified portfolio of securities. The shares in the fund purchased by individual investors represent an ownership interest in the pool of underlying assets—that is, the investors have an equity stake. Because professional fund managers make the selection of assets, mutual funds provide individual investors with an opportunity to invest in a diversified and professionally managed portfolio of securities without the need of detailed knowledge of the individual companies issuing the stocks and bonds. Usually, fund managers must adequately inform investors about the risks and expenses associated with investment in specific funds. http://ec.europa.eu/eurostat/ramon/statmanuals/files/external_debt_guide_2003_EN.pdf#page=227