Fund Hot News

A mutual fund is a type of investment in the form of a collection. This collection usually consists of stocks and other securities. It is a very popular kind of investment that enables you to hand over the investment decision to a money manager. This manager is generally much more experienced in investing than most investors. This article handles the basics about how mutual funds work.

Investors can buy shares of a particular fund which is managed by an investment manager. Different people can obtain portions of the fund, but only one fund manager decides which stocks or bonds get purchased for the fund to make it grow. The fund manager gets compensated by receiving fees from the investors of the mutual fund. But why would you pay someone else to buy different kinds of investments when you could do it yourself? Continue reading ‘How Mutual Funds Work: The Beginners Guide’ »

What is an exchange-traded fund (ETF)?

An ETF Investment is an exchange-traded fund, a type of investment vehicle traded on stock exchanges. ETF stocks are traded like single shares, with the prices moving throughout the day.

An ETF typically holds assets such as stocks (typically a mixture of investments in unit trusts and investment trusts) or bonds. Many ETFs in fact track an overall index, such as the S&P 500 or MSCI EAFE. An ETF’s overall value is usually around the same price as the net value of the asset value of its underlying assets; if it is tracking an overall index, its value typically moves in line with changes in that index. Only “authorized participants” (typically large investors) are actually permitted to deal directly with the ETF in terms of buying or selling shares from or to the fund manager. Such transactions usually involve the purchase or sale of “creation units” (i.e. groups of tens of thousands of ETF shares. Individual investors then go through these “authorised participants” to buy ETF stocks and to formulate their ETF trading strategies. Continue reading ‘ETF Investment – What is it and How Does it Work?’ »