What is a Mutual Fund? | Finance in 5 Minutes скачать в хорошем качестве

What is a Mutual Fund? | Finance in 5 Minutes

A mutual fund is a professionally managed investment vehicle that pools money from many investors to buy a diversified portfolio of stocks, bonds, or other securities. Mutual funds make it easy for everyday investors to access broad market diversification without needing to pick individual stocks. In this episode of Finance in 5 Minutes: Money Terms Explained, we break down everything you need to know about mutual funds — from how they work to how they can help you build long-term wealth. Key topics covered in this video: • How mutual funds work — your money is pooled with other investors to buy a large portfolio, and you own a proportional slice of every holding • Net Asset Value (NAV) — how mutual fund prices are calculated once daily at 4 p.m. • Active vs. passive management — the difference between a human manager trying to beat the market and an index fund that simply tracks it • Types of mutual funds — money market, bond, equity, and target date funds explained • How your money grows — through dividends, capital gains, and rising NAV • Fees and expense ratios — why even small annual fees can cost you thousands over a lifetime • Mutual funds vs. ETFs — same assets, different trading mechanics • Avoiding "diworsification" — why owning five similar funds hurts rather than helps your portfolio • How to buy your first fund — through a 401(k) or brokerage account Whether you're just starting to invest or looking to strengthen your retirement strategy, understanding mutual funds is essential. They offer diversification, professional management, and accessibility — but you need to watch out for fees, tax inefficiency, and redundancy. This video is part of the Finance in 5 Minutes series, where we explain key money terms in plain language. Subscribe and hit the bell so you never miss an episode!