mutual fund

mutual fund
an investment company that issues shares continuously and is obligated to repurchase them from shareholders on demand.
Also called open-end investment company. Cf. closed-end investment company.
[1790-1800]

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or unit trust or open-end trust

Company that invests the funds of its subscribers in diversified securities and issues units representing shares in those holdings.

It differs from an investment trust, which issues shares in the company itself. While investment trusts have a fixed capitalization and a limited number of shares for sale, mutual funds make a continuous offering of new shares at net asset value (plus a sales charge) and redeem their shares on demand at net asset value, determined daily by the market value of the securities they hold.

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also called  Unit Trust, or Open-end Trust,  

      company that invests the funds of its subscribers in diversified securities and in return issues units representing shares in those holdings. It differs from the investment trust (q.v.), which issues shares in its own capital. In contrast to closed-end investment companies, which have a fixed capitalization and whose shares are bought and sold by the investor in the market, mutual funds make a continuous offering of new shares at net asset value (plus a sales charge) and redeem their shares on demand at net asset value, determined daily by the market value of the securities they hold.

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Universalium. 2010.

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