What type of investment fund pools money from multiple investors?

A mutual fund is a type of investment fund that pools money from multiple investors to create a diversified portfolio of stocks, bonds, or other securities. This collective approach allows individual investors to gain access to a wider range of investment opportunities that they might not be able to afford or effectively manage on their own.

The structure of a mutual fund is designed to facilitate this pooling, where investors buy shares in the fund, and the fund manager makes investment decisions on behalf of all shareholders. This model not only helps in spreading risk among a larger group but typically offers passive management of investments, making it easier for individuals to grow their wealth without the need for direct involvement in the stock selection or trading processes.

In contrast, while private equity funds and pension funds also involve pooling resources, they operate under different mechanisms and investment strategies. Private equity funds generally focus on acquiring and managing companies, often engaging in longer-term investments that require substantial capital commitments and are not as liquid as mutual funds. Pension funds are specifically designed to provide retirement income, investing contributions from employers and employees over a long period, usually with a focus on stable, long-term returns to support future obligations to retirees. Stock investment isn't a pooled fund but rather a method of investing directly in individual company shares, lacking the