Investing

Funds

A fund pools money from many investors and uses it to hold a collection of investments.

4 min

Investing 101 • 05

A fund is a pool of investments.

Many investors put money into the fund, and the fund owns assets such as stocks, bonds or both.

You own units or shares of the fund rather than directly owning every underlying asset.

The value of your fund holding reflects what the fund owns and the costs of running it.

Funds can differ by

01What they invest in02How actively they are managed03How diversified they are04Fees and expenses05How they are bought and sold

One fund can hold many securities.

01

Single security

One company or one bond issuer may drive most of the outcome.

02

Fund

Can spread money across many holdings, depending on its mandate.

A fund can turn one purchase into many underlying holdings.

Investor buys1 fund
Fund ownsDozens or hundreds of securities
DiversificationDepends on what those securities are
CostFund fees still matter

More holdings do not automatically mean better diversification.

A fund can still be concentrated in one country, industry or type of asset.

Before buying a fund, check

01Its objective02What it actually owns03Its risk level04Its fees05How it fits with your other holdings

Remember this

A fund is a container for investments.

The important question is what is inside the container.

Lesson complete

Reviewed 2026-08-18

Sources

Ontario Securities Commission, GetSmarterAboutMoneyTypes of investments ↗Ontario Securities Commission, GetSmarterAboutMoneyMutual funds ↗
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