What is a Mutual Fund | by Wall Street Survivor

What is a mutual fund?

A mutual fund is a professionally managed investment vehicle that pools money from many investors to purchase securities (stocks, bonds, money market instruments etc.). A money manager then decides how the funds are invested so you don’t have to – but you pay for it. A mutual fund’s management and operational fees, known as the management expense ration (MER), are deducted from the return on your investment.

While it is tempting to think that a mutual fund is a hedge fund…it’s also incorrect. Mutual funds aren’t hedge funds because mutual funds can be sold to the general public - unlike hedge funds.

There are many kinds of mutual funds:
 Specialty funds that focus on particular market sector (energy, health, etc.)
 Index funds (which track a market index like the S&P 500)
 Real estate funds

[FernandoBowen-]

I'm 54 and my wife and I are VERY worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them. We can get by, but can't seem to get ahead. My condolences to anyone retiring in this crisis, 30 years nonstop just for a crooked system to take all you worked for.

[dajumpoff]

This is the best explanation on the net. Makes sense now

[changeme]

Awesome. Even my university professor couldn't explain it such a simple but effective way. Thanks.

[wifimanboy]

why dont they teach this in high school

[rowdyyeats]

A mutual fund manager, who has received monies from a
mutual fund representative, who has received money from you,
the mutual fund investor, then buys the shares of
publically-traded companies.  Your mutual fund units represent
a share (or portion, or percentage) of the total number of shares
of companies bought by the the mutual fund manager, as well as
the cash on hand, yet to be used. 

This practise, is promoted by many
(including the mutual fund industry) as being safe
because the manager is offering the service of
PARTICIPATING in the "financial rewards"
of "owning" a DIVERSIFIED portfolio of stocks. 
But technically, the mutual fund corporation owns the portfolio
(or bundle) of stocks, and NOT the mutual fund investor. 

The mutual fund investor owns a claim against that portfolio however,
and if he should sell his units, the fund manager must sell shares (if need
be) to raise the cash that he owes the investor, based upon what that
portfolio is worth, and what percentage of the portfolio the investor
contributed to.  It is the mutual fund manager, and NOT the mutual fund
investor who controls the voting rights of those shares.  Basically,
mutual fund investors are helping THEM buy votes, with which THEY
might influence, or control, corporate policies (governance).

[roughryder]

I love these kind of videos. Short and sweet with awesome visuals.

[theopats]

Amazing video, straight to the point and short. Thank you

[bluberytoze]

hey, what program did you use to make this video? It seems like the perfect way to present things...

[moemenshahawy]

I have to say, thank you! I've been reading on my bank's website about mutual funds and it was full of elvish writings (NAV and shit)... so really thanks :)

[miquel]

1:48 only ETFs are traded on the stock markets.

[MzKegz]

Best explanation thank you my good man

[missfangalon]

Please tell me why we should trust Wall Street?

[jamiefarlow]

Maaan.. great video.. but lower your volume!

[Pretzel]

One thing I’ll never understand are mutual funds

[peytonturner]

Wait, but how the hell does Will make his money?

[kazi]

This sent millions of avergae americans down the drain

[Sir-Kay]

At 1st, N.A.V. was 10k then, after 3 months they say the NAV is 1.1k, isn't it supposed to be 11.1k in value? Who will you trade your position with incase you want out? who is that imaginary person just waiting in line to join the mutual funds? And, who makes sure we're always making the right investment decisions? I mean Will gets paid if the fund gains or loses value, lol! Folks, other than Will earning on the gullible friends' "investments" tell me someone other than the ceos and fund managers who has actually built wealth investing in these snakes oil crap. I'll wait.

[yhovenigdao]

bluberytoze the video was done using after effects. If you guys need a video something like this you can contact me and I will create you one.

[LeonXOV]

anyone's iphone keep restarting because of this video?? make me have no choice but only could watch on pc