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What is a Mutual Fund
A mutual fund1 is a type of investment in which the money of many investors are pooled together to buy a portfolio of different securities. The fund is managed by professional(s) Investment Managers who invest in stocks, bonds, options, money market instruments or other securities.
When you invest in a mutual fund, you receive units of the fund. Each unit represents a proportionate share of all of the mutual fund's assets. All of the investors in a mutual fund share in the fund's income, gains and losses. Investors also pay their share of the fund's expenses. Mutual funds can help you in the execution of your financial plan that will grow your savings, while managing liquidity and risk.
Why Invest In Mutual Funds
Mutual funds offer investors three key benefits: professional money management, diversification and accessibility.
Professional money management
Professional Investment Managers have the expertise to make the investment decisions. They also have access to up to the minute information on trends in the financial markets, and in-depth data and research on potential investments.
Diversification
Because your money is pooled with that of other investors, a mutual fund offers diversification into many securites that may not have otherwise been available to individual investors.
Accessibility
Mutual funds typically have relatively low investment minimums, making them accessible to nearly everyone.
While mutual funds have many benefits, it is important to remember that an investment in a mutual fund is not guaranteed.
How do I choose the Right Mutual Funds
To decide which investments are best suited to you, you need to determine your investment objectives, time frame and tolerance for risk. The Scotia Investment Selector® tool and your Scotiabank Investment Advisor will help you determine the right selection of Scotiabank Mutual Funds for your portfolio.
1 Mutual funds are not insured with the Deposit Insurance Corporation
® Standard and Poor's, S&P and S&P 500 are trademarks of The McGraw-Hill Companies and have been licensed for use by The Bank of Nova Scotia and its subsidiary companies.
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