What is an ETF?
Allrates
Published Jan 29, 2019 06:38AM ET
Updated Jan 29, 2019 07:07AM ET
A mutual fund is a collective pool from investors, operated by money managers who create a diverse portfolio with the funds. Think of it as people coming together to put their money together for stronger investments and lower risk.
The risk is lower because funds are invested in various securities (such as stocks and bonds) so if one investment does poorly, another investment will likely do well and even it out. This means the investors will have lower risk and (hopefully) high reward.
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Written By: Allrates
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