Understanding Funds
Funds are essentially pools of money collected from various investors for a specific investment purpose. These funds are managed by financial professionals who make strategic decisions to grow the fund’s value.
Types of Funds
- Mutual Funds
- Hedge Funds
- Private Equity Funds
- Venture Capital Funds
Functions of Funds
Funds provide investors with an opportunity to diversify their portfolios, access professional expertise, and benefit from economies of scale.
Case Study: Mutual Funds
Investors can buy shares in a mutual fund, which then invests in a diversified portfolio of securities such as stocks and bonds. This provides individual investors with access to a diversified investment portfolio managed by professionals.
Statistics on Funds
According to a report by Statista, the global mutual fund market was valued at $40.356 trillion in 2020, indicating the significant size and importance of funds in the investment world.
