About

What are mutual funds?

A mutual fund pools money from a set of different investors in order to invest in a portfolio of asset classes like stocks and bonds. Unlike the stock market, in which investors purchase shares from one another, mutual fund shares are purchased directly from the fund or a broker who purchases shares for investors. Mutual funds are an excellent investment option for small or individual investors who are looking to diversify their portfolios and access professionally managed portfolios of equities, bonds, and other securities. These funds are operated by experienced money managers who allocate the fund’s assets and strive to produce capital gains or income for the fund’s investors

One of the most popular and common types of mutual funds tend to be equity funds, which invest in stocks, including Canadian equities and small or large cap businesses. Other common mutual funds include money market funds, which invest in short-term fixed income securities such as government bonds or treasury bills. Fixed income funds are another fund type that focus on investments that pay a fixed rate of return like government bonds, investment-grade corporate bonds and high-yield corporate bonds.