The value of a fund share is expressed in terms of its net asset value . Because net asset value rises and falls with the market prices of a fund's holdings, the funds calculate a new price at the end of each day. A few specialized funds value their shares hourly. The price at which you buy shares or sell them back to the fund is based on the next calculated net asset value following receipt of your order. When you invest by dollar amounts, your purchase will probably include a fractional share.
Shareholders get the profits.
A fund makes money from dividends and interest on the securities it owns and from capital gains made on the sale of those securities or other investments. If its portfolio selections are bad or the market turns sour, the fund will probably lose money. Virtually all income left after payment of management fees and other expenses is distributed to shareholders. How funds pay you Funds earn money for their investors in several ways. The stocks or bonds a fund owns pay dividends or interest, and the fund distributes this money to you as dividends.