They're highly popular because they provide the major benefits of investing at a moderate level of risk. A mutual fund is a pool of money created by a large group of investors. The pool represents the group's mutual portfolio of investments. When you buy into a mutual fund, you are adding your funds to this pool. The funds are invested in diversified instruments including T-Bills, government bonds, and shares in companies traded on stock exchanges.
Mutual funds are long-term investments.
A fund's success and the benefits to investors are measured by the performance or growth rate over several years. Select the type of fund that matches your financial objectives. Some funds aim for rapid growth with higher risk, while others strive for steady growth with lower risk. Many credit unions offer a group of Ethical Funds that screens investments, based on environmental and social concerns. You should consult your credit union for more information.