By Ziv Shay | Updated June 2026

Mutual Fund

A pooled investment that collects money from many investors to buy a professionally managed portfolio of stocks or bonds.

Mutual funds let investors pool money to access a diversified, professionally managed portfolio. Unlike ETFs, they trade only once per day at the closing net asset value (NAV). They come in active (manager-picked) and passive (index-tracking) varieties; passive mutual funds behave much like index funds with low fees.

Example

Fidelity’s FXAIX is an S&P 500 index mutual fund. You buy in dollar amounts (e.g., exactly $500) rather than whole shares, and the trade executes at the end of the trading day.

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