How a Mutual Fund Works
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Many investors wonder what is going on behind-the-scenes when they invest in mutual funds. Much of the time, there is a board of directors or trustees that monitor the fund and make decisions based on shareholder interests.
There are many other agents involved in the management of a fund, such as accountants, auditors, and transfer agents. All of these entities receive payments for their roles in managing the fund.
Once you write a check to start investing, there is a process your funds follow. It is not absolutely necessary to understand all of the inner workings of investing in mutual funds, but it helps to know how your money is handled. For beginners, this is an excellent look at how mutual funds are structured.