Editing Mutual fund (section)

==Features==
Like other types of investment funds, mutual funds have advantages and disadvantages compared to alternative structures or investing directly in individual securities. According to [[Robert Pozen]] and Theresa Hamacher, these are:

===Advantages===
* Increased opportunity for [[Diversification (finance)|diversification]]: A fund diversifies by holding many securities. This diversification decreases risk.
* Daily liquidity: In the United States, mutual fund shares can be redeemed for their net asset value within seven days, but in practice the redemption is often much quicker. This liquidity can create [[asset–liability mismatch]] which poses challenges, which in part motivated an SEC liquidity management rule in 2016.<ref name=":3">{{Cite web | title=Investment Company Liquidity Risk Management Programs RIN 3235-AL61 | url=https://www.regulations.gov/document/SEC-2016-2027-0001 | website=[[Regulations.gov]] | access-date=2021-10-03 | archive-date=2021-10-03 | archive-url=https://web.archive.org/web/20211003014223/https://www.regulations.gov/document/SEC-2016-2027-0001 | url-status=live }}</ref>
* Professional investment management: Open-and closed-end funds hire portfolio managers to supervise the fund's investments. 
* Ability to participate in investments that may be available only to larger investors. For example, individual investors often find it difficult to invest directly in foreign markets. 
* Service and convenience: Funds often provide services such as check writing.
* Government oversight: Mutual funds are regulated by a governmental body
* Transparency and ease of comparison: All mutual funds are required to report the same information to investors, which makes them easier to compare to each other.<ref name=Managed/>

===Disadvantages===
Mutual funds have disadvantages as well, which include:
* [[Mutual fund fees and expenses|Fees]]
* Less control over the timing of recognition of gains
* Less predictable income
* No opportunity to customize<ref name=Managed/>