How Do Mutual Funds Work?

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Mutual funds are a type of investing in which an individual can deposit money into a fund and receive a share in the value of that mutual fund. Find out about the strategy of mutual funds to invest in certain parts of a market place with help from a registered financial consultant in this free video on investing and money management.

Part of the Video Series: Investment Basics
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Video Transcript

This is financial adviser, Patrick Munro, talking about How Do Mutual Funds Work? Mutual funds are a type of investing that an individual can go to a fund or fund family, deposit dollars, and receive, really, a share or ownership position in the value of that mutual fund. Many mutual funds have a strategy to invest in a certain part of the market place. Maybe a gold mutual fund. Maybe an energy or oil-based mutual fund. The always available, that mutual funds do charge for the management of the money. And, so, a mutual fund always has to have a fee. Be aware that those fees are coming right out of the return, so you have to look at the track record of these mutual funds, and the best place to do that is online at Morning Star is one of the preeminent benchmarks to find out how mutual funds have been performing against their averages over a longer period of time. This is Patrick Munro talking about how mutual funds work.


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