When you buy a mutual fund, what do you actually own?

When you buy units in a mutual fund, you indirectly own a piece of the companies in which the fund invests. Here’s how it works:

When you place money in a mutual fund, the fund manager invests the money in shares (or bonds or other investments) of various companies or governments, and holds those shares or bonds on behalf of everyone who invests in the mutual fund. These assets are held and managed according to the investment policy that has been set for that mutual fund. The investment policy is described in the mutual fund’s Simplified Prospectus and summarized in its Fund Facts.