Mutual funds - additional information
Mutual funds are a form of collective investment. The investors’ money is pooled together and invested in selected financial instruments, according to the strategy defined in the fund prospectus. There are different types of mutual funds available to the investors, corresponding to the return expectation and risk level that they are ready to take.
In the times of turbulence in the financial markets, money market or bond funds can be an attractive option for the investors, as they offer low, but low-risk return. When the situation on the financial markets stabilizes and investors return to the stock trading, equity funds may become a good investment opportunity.
The size of a mutual fund is defined as total net assets (TNA) or assets under management (AUM). TNA measures the total value of all financial assets held by the mutual fund. The TNA of the mutual funds globally amounted to 26.13 trillion U.S. dollar in 2007, the year preceding the financial crisis. In 2008, the global value of mutual funds decreased to 18.92 trillion U.S. dollars. In 2014, the mutual funds globally were valued at 31.38 trillion U.S. dollars. In the United States, the mutual fund market was worth 15.85 trillion U.S. dollars in 2014.