What is a mutual fund?

As a professionally operated type of massive investment pattern, a mutual fund absorbs money from various investors and its investing area is mainly the securities covering stocks, bonds, short-term money market instruments, other mutual funds, other securities, and/or commodities such as precious metals. Determined by the investment objective, the fund’s investments will be traded by its specialized fund manager. In the States, if a fund gains profits, almost all the net income and the earnings of selling any securities must be distributed to the investors at least on a yearly basis according to the compulsive regularities of the Securities and Exchange Commission (SEC) under both SEC and Internal Revenue Service (IRS) with which the fund has been registered. The fund is managed by its investment adviser and other service organizations and vendors, but the best interests of the fund's investors will be guaranteed with supervision of a board of directors or trustees (if the U.S. fund is organized as a trust as they commonly are).