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Mutual Funds Pool Money from The Investing Public and Use That Money to Buy Other securities , Usually Stocks and Bonds. the value of the Mutual fund company depends on the Performance of the securities it decides to buy. So when you buy a unit or share of a mutual fund, you are buying the performance of its portfolio or more precisely a part of the portfolio's value. Investing in a hare of a mutual fund is different form investing inshares of a mutual fund is different from investing in share of a stock. unlike stock , mutual fund shares of a mutual fund is differnt from investing in share of a mutual fund represents investments in many different stocks instead of just one holding.
That's why the price of a mutual fund share is referred to as the net asset value per share, sometimes expressed as NAVPS a fund's NAV is derived by dividing the total value of the securities in the port folio by the total amount of shares outstanding shares are those held by all share holders institutional investors and company officers or insiders. Mutual fund shares can typically be purchased or redeemed as needed at the fund's current NAV which unlike a stock can tupically be purchased or reddemed as needed at the fund's current NAV.
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