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An investment fund is any that manages portfolios of money. There are basically two types of investment funds - open-ended mutual funds, which are also known as unit trusts, and closed-end publicly quoted funds, which are known as investment trusts. Both are means of pooling funds to allow investors to diversify their investment assets. Open-ended funds sell shares to the public, with each share representing proportionate ownership of the underlying assets of the fund. The fund managers can create more shares, or reduce the total, according to demand from the public. A closed-end fund has a predefined and fixed number of shares available to the public. The number of shares cannot be increased. Fresh demand for investment in the fund will push up the price of existing shares, allowing the fund manager to issue more shares.
► See also Mutual Fund/Unit Trust, Investment Trusts.
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investment fund UK US noun [C] FINANCE
► a company that invests in shares, bonds, etc. for investors: »
The investment fund has a portfolio of shares worth $180 million.
»Most cautious investment fund managers favour equities over bonds.
► an amount of money for investing for a particular purpose: »
Sterling is strong, and investment funds are pouring into London.
Financial and business terms. 2012.