Mutual Fund
A mutual fund is a professionally managed investment vehicle that pools money from many investors to purchase a diversified portfolio of stocks, bonds, or other securities.
🔑 Key Characteristics
| Property | Detail |
|---|---|
| Code in LibreFolio | FUND |
| Pricing | NAV (Net Asset Value) calculated once per day, after market close |
| Currency | Denominated in the fund's base currency |
| Dividends | May distribute (income funds) or reinvest (growth funds) |
| Fees | Management fee (TER), entry/exit loads |
| Typical providers | Yahoo Finance, Manual |
📊 How Mutual Funds Work
- Pooling: Investors buy shares/units of the fund
- Management: A professional fund manager selects and manages the underlying securities
- NAV pricing: The fund's value is calculated daily as: total assets − liabilities ÷ shares outstanding
- Distributions: Income (dividends, interest) may be distributed or reinvested
📐 NAV Calculation
\[
\text{NAV} = \frac{\text{Total Assets} - \text{Total Liabilities}}{\text{Shares Outstanding}}
\]
Unlike ETFs, mutual funds trade only at end-of-day NAV — you cannot buy or sell at intraday prices.
🔗 Related
- 📊 ETFs — Exchange-traded alternative with intraday pricing
- 💰 Taxation — Distribution vs accumulation tax implications
- 📈 Returns & Growth Rates — Measuring fund performance