When you invest in a mutual fund, you get a portion of the fund, or a number of units. Your units, along with units held by other investors, represent ownership in the fund. The mutual fund company invests the money based on specific goals and procedures that it must state, by law, in a document called a simplified prospectus. The prospectus can be a bit intimidating because even if it is written in simple language, it may still be fairly complex. The main points to look for are the fund's investment objective, any fees and expenses, and how to buy and sell your units.
Most funds hold a variety or number of investments at any given time.
And the holdings in a fund will differ depending on its objectives and the style of the fund manager. The act of buying and selling investments, changes in interest rates and economic trends influence the value of the individual investments in a fund's portfolio and can cause the value of a fund to fluctuate daily. This means the value of your units in a fund can go up or down from day to day. Some fund prices will rise and fall more than others. It's important to understand the objectives of each fund so you can make sure you are investing in a fund that suits you.