Aside from professional money management, the concept of mutual fund investing offers a number of advantages over individual investments. Mutual funds also offer a high degree of liquidity. That is, they're easy to buy and redeem without the investor having to worry about locking-in money for long periods of time. Mutual funds also allow investors to pool their money with those who have similar goals through a wide selection of investments specializing in different types of securities and property. For example, those seeking income might invest in a fund that has a portfolio of bonds or mortgages, while those seeking maximum growth of capital might buy units in a fund that invests in stock market securities.
Mutual funds offer professional investment management at an affordable price.
They offer safety through diversified portfolios. There is a broad choice of funds to meet virtually every investment objective. Finally, mutual funds have given investors excellent returns, better than most individuals would have been able to achieve on their own. A fund therefore is simply a cooperative means for many people to pool their savings together and have their investment professionally managed in the type of investment they choose. This pooled concept is one that allows numerous investors to put relatively small amounts of money into investments.