Mutual funds are pooled investment assets organized under the Investment Company Act of 1940. Another term for mutual funds is open-end funds. The open end comes from the ability of a fund to issue more shares if investors want to buy, and redeem shares if investors want to sell. This is in contrast to market-traded securities with a limited number of shares available for trading or investment.
Not Exchange Traded
Mutual fund shares do not list on any stock exchange. Stock exchanges promote the buying and selling of shares. Mutual fund shares are not traded between investors like individual stocks or closed-end fund shares. The mutual fund company handles all buying and selling of fund shares. This function of mutual funds means there is no centralized listing place for mutual fund shares. Each fund company is responsible for its own price updates.
Mutual Fund Share Prices
The share price of a mutual fund is officially referred to as the fund's net asset value (NAV). The share value is calculated once a day after the markets close. A fund company determines the daily NAV by calculating the current total value of the fund's investment portfolio and dividing it by the number of outstanding shares. All fund purchase and redemption orders received during the day will be completed and the NAV price calculated at the end of the day.
Finding Share Prices
A mutual fund company will update a fund's NAV at the end of the day and publish the current price on its website. The majority of fund companies manage a family of funds ranging from a few funds to hundreds. For an investor owning multiple funds in the same family can check the fund's website for the latest share price information.
Fund Share Considerations
Although mutual fund shares are not listed or traded on any exchanges, funds still are assigned ticker symbols. A fund's ticker symbol can be used to look up the share price on one of the financial websites. Just remember, the price only changes once a day when the fund company updates the NAV. It is also possible to own mutual fund shares in a brokerage account. In this case the broker acts as your representative to purchase or redeem shares with the fund company.
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