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Investment Fund

An investment fund is a pool of capital collected from multiple investors to invest in a variety of assets, such as stocks, bonds, real estate, or commodities. Investment funds are managed by professional portfolio managers who allocate the pooled money to achieve the fund’s investment objectives. Common types of investment funds include mutual funds, exchange-traded funds (ETFs), and hedge funds. They provide diversification, allowing investors to reduce risk by spreading their investments across different asset classes.

Example

A mutual fund pools money from investors to buy a diversified portfolio of stocks and bonds, providing individual investors with exposure to a broader range of assets than they could afford on their own.

Key points

• A pool of capital from multiple investors managed by professional portfolio managers.

• Types include mutual funds, ETFs, and hedge funds.

• Offers diversification, reducing risk by spreading investments across assets.

Quick Answers to Curious Questions

Investment funds offer diversification, professional management, and access to a broad range of assets, reducing individual risk.

Investment funds invest in a range of assets, including stocks, bonds, real estate, and commodities.

By pooling money from multiple investors, funds can diversify investments across asset classes, reducing the impact of any single investment's poor performance.