fund

A fund is a pool of money collected to achieve a stated objective, such as investment growth, income, or charitable use. It is managed by an organization or individuals who invest the collected capital on behalf of the contributors or beneficiaries. Ownership is typically represented by shares or units in the fund.

Funds come in various forms. Investment funds include mutual funds, index funds, ETFs, and hedge funds. Pension funds and sovereign wealth funds manage large pools for long-term obligations, while endowment, charitable and disaster-relief funds support specific causes.

A fund is typically governed by a mandate or prospectus that specifies allowed investments, risk, liquidity, and fees. A fund manager makes daily decisions and charges fees, such as a management fee and sometimes a performance fee. Assets are held by a custodian and reported regularly.

Valuation is based on net asset value (NAV), calculated by dividing total assets by outstanding shares. Most funds offer periodic redemption, but terms vary. Some funds impose lockups or notice periods to manage liquidity.

Regulation varies by jurisdiction but usually requires disclosure, fiduciary duties, and limits on leverage and conflicts of interest. Funds may be registered with authorities and overseen by market regulators, pension, or charitable regulators.

Funds pool resources to access diversified portfolios, manage risk, and scale investments beyond what individuals can achieve.