In around two minutes you will know what is a Mutual Fund. You will get both professional definition and easy explanation. No intro, no outro, straight to the point.

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Mutual Fund is an open end fund type which uses pooled investors' money to invest in securities, such as stocks, bonds, or any other financial assets.

And if you are not sure what an open end fund means, feel free to watch my previous video.

Every Mutual Fund has a fund manager. He or she actively manages the fund, by selecting new investments and getting rid of unprofitable ones.

For this reason, investing in index funds always comes with additional fees.

Think about mutual funds as a place, where people deposit their money and let professionals do all the investment related work.

Investing in mutual funds might be a good idea if you are not feeling confident about finances and making your own investment decisions.

One thing to know about mutual funds is that their shares are not traded on the stock market.

You buy and sell mutual fund shares directly from these funds. And the share prices change daily.

The price is determined at the end of each day. And it is the representation of Net Asset Value. Which is basically Total Assets Value minus Total Liabilities, divided by Total Shares Outstanding.

The way investors can make money from investing in Mutual Funds is through dividends or capital gains distributions.

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