What is a Mutual Fund?
• Mutual Fund (simplified) – A particular collection of financial instruments controlled and created by a manager with fiduciary responsibilities to buyers (it is a list, a virtual asset of virtual assets) Characteristics of this List: • Stocks and / or Bonds and / or Cash (limited to some particular blend) • Focused on particular ‘sector’ (industries and sub-industries) • Controlled by geographic boundaries (regions, countries, continents) • Limited by charter to particular ‘styles’ (think style boxes) • Restrained in types of trades and % Cash (usually no derivatives, shorting, options) • In exchange for the manager (cost overhead), Buyers expect – Preservation and Growth of their capital (above averages) – Returns in the forms of dividends, capital gains distributions, … – Steady, smooth NAV, no surprises, low volatility – Salability / liquidity •Value is “created” by the superimposition of the collective performance of the individual virtual assets as a grouping (lis...