The securities a mutual fund invests in are kept under lock and key by an appointed custodian, usually a bank. The custodian may respond only to instructions from fund officers responsible for dealing with the custodian. The custodian safeguards the fund's assets, makes payments for the fund's securities, and receives payments when securities are sold. Fund transfer agents maintain shareholder account records, including purchases, sales, and account balances. The underwriter is an organization with a staff of salespeople who either administers sales directly to the public or meets with the brokerage firms to convince them to sell the fund.
Brokers sell fund shares to the public and collect a commission for the sale.
There are a lot of important people and ingredients that go into the making of a mutual fund. The major difference between investing in a mutual fund and investing in an individual stock or bond is that with a mutual fund, instead of buying just one stock or bond, you really buy a portion of a variety of investments. Exactly how much money you make or lose in a mutual fund can change daily, as you'll learn in later chapters. It all depends on how many shares you own and how well your mix of investments perform. Owning a lot of different investments helps to protect you against losing money.