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Financial Word of the Week: Mutual Fund

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Financial Word of the Week - mutual funds

A mutual fund is an easy way to invest your money and receive the benefits of a diversified investment portfolio. The fund is usually made up of multiple types of investments like stocks or bonds. The fund’s portfolio manager handles your money invested in the fund.

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Just like with any investment tool, there are advantages and disadvantages to consider.  Here’s a short list:


  • Investors with smaller amounts can get into the game. Your investment is affected by ups and downs of the market and may generate additional taxable income.  Remember, you are pooling your investment with a group of people who are all hoping to make a profit.
  • You are working with professionals who have your best interest in mind. Mutual funds bring diversification, meaning you can spread your money out into multiple investment strategies. The funds are usually very liquid as well, meaning you can access your money in a short period of time..


  • You don’t have control over the fund – the portfolio manager and the market do. It will be important to trust your portfolio managers in the decisions they will make for you and to carefully select funds based on your risk tolerance and investment time frame.
  • Management fees are most likely associated with the fund, so it is important to understand the fee structure. Another thing to consider is that you will not know the exact price of your fund before you invest or redeem. The price of most funds is determined once every business day after the market is closed and your trade is valued at that price.

If you want more information about mutual funds, we recommend doing some research through the U.S. Securities and Exchange Commissionor the Investment Company Institute.


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UMB Financial Corporation (Nasdaq: UMBF) is a diversified financial holding company headquartered in Kansas City, Mo., offering complete banking services, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas, as well as two national specialty-lending businesses. Subsidiaries of the holding company include companies that offer services to mutual funds and alternative-investment entities and registered investment advisors that offer equity and fixed income strategies to institutions and individual investors.

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