What are mutual funds and should I invest in them?

Publish date July 20, 2017

A mutual fund is a group of investments, such as stocks or bonds, contained in a single fund.
This way, mutual funds allow you to invest in several different companies or bonds at the same time.
Investing in mutual funds means putting some of your money in a larger pool of funds managed by professional money managers.
Because of the large sum of money in the pool, and because your money is managed by specialists, mutual funds can help you diversify your investments more than you may be able to on your own, reducing your risk.
Your investment representative can help you pick mutual funds that reflect your comfort with risk and unique investment goals, putting you in control. Your choice of mutual funds can be updated as your life changes.

Diverse options

Choosing a single company, industry or security to invest in can be daunting. Mutual funds can help by allowing you to diversify your investments in many different companies and industries, or in bonds and other securities.

Funds when you need them

Typically, mutual fund units can be redeemed – or “cashed out” – at any time. The redemption value will depend on the structure of the fund’s sales charges and the fund’s unit value on the day of redemption, which may be lower or higher than the original purchase price.

Cost effective

Buying a mutual fund means investors can put their money into a variety of securities at a fraction of the cost of purchasing a similar mix of securities individually – a cost that’s shared with other investors.