Mutual Fund

A pooled investment vehicle that collects money from many investors to buy a diversified portfolio of stocks, bonds, or other securities, managed by a professional fund manager. Mutual funds are priced once per day at their net asset value (NAV) after the market closes. While they democratized investing for millions of Americans starting in the 1980s, actively managed mutual funds have increasingly lost market share to lower-cost index funds and ETFs, as decades of data show that most active managers fail to beat their benchmarks over time.