What are the benefits of a mutual fund?
There are several reasons why an investor might choose to invest in a mutual fund. To name a few, mutual funds typically require a small initial minimum investment amount and are traded once per day at their closing Net Asset Value (NAV), allowing them to be relatively accessible for most investors.
Another advantage of mutual funds is that there is a team of professionals behind the scenes managing the mutual fund. For actively managed funds, fund managers follow market opportunities and other strategies to determine which stock, bond and other securities to buy and sell, with the intention of achieving the investment objective of the mutual fund.
Finally, mutual funds offer diversification. Since most mutual funds tend to invest in several different securities, the risks associated with investing in a single security are reduced because you're not putting all your eggs in one basket.
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