A professionally managed group of investment accounts are called mutual funds. These funds provide the opportunity to diversify investments toward the goal of long- term financial gain. Fund companies may have different plans that allow the investor to emphasize investment returns such as growth, growth and income, or income only. Funds may also be directed at a particular type or area for investment such as bonds, money market funds, or overseas investments; some may be tax-free.
A security that gives small investors access to a well-diversified portfolio of shares, bonds, and other securities. Each shareholder participates in the gain or loss of the fund. Shares are issued and can be redeemed as needed.