What a mutual fund is (units and NAV)
What you'll be able to do
A mutual fund is a professionally-run basket; you buy units priced once a day at NAV.
- A fund pools money and is professionally managed to a stated mandate.
- Investors own units; NAV = (assets − liabilities) ÷ units.
- Most funds price once daily after close, not intraday.
A mutual fund pools money from many investors and hires a professional manager to invest it according to a stated mandate. Each investor owns units of the fund rather than the underlying stocks and bonds directly. It's a way for a small saver to own a slice of a large, diversified, professionally-managed portfolio.
The price of a unit is the Net Asset Value (NAV): the total value of everything the fund holds, minus its liabilities, divided by the number of units. Most funds strike one NAV per day after markets close — so unlike a stock, you don't trade a fund at a live intraday price. The fund's mandate (in its Fund Facts document) tells you what it's allowed to hold and what risk level it targets.
Because the client owns units of a blended portfolio, your recommendation is really about the mandate and the mix — not a single company. Knowing how to read the Fund Facts is the core skill.
Key points
- A fund pools money and is professionally managed to a stated mandate.
- Investors own units; NAV = (assets − liabilities) ÷ units.
- Most funds price once daily after close, not intraday.
- Fund Facts is the plain-language source for mandate, risk, and cost.
Examples
Before recommending a fund, a seller opens its Fund Facts: objective, risk rating, top holdings, and cost. If those don't match the client's plan, the brand name doesn't matter.
Pitfalls
- Treating a fund like a stock that trades at a live intraday price.
- Recommending a fund without reading its mandate and risk rating.
Ask your sales coach
In a real Adept rollout this routes to your firm's compliance-approved Claude project; in the demo it opens a fresh Claude chat. Never share real client details.