Mutual (Contractual) Fund

A type of collective investment scheme in which multiple investors pool their funds into a shared investment portfolio managed by a licensed management company. The fund does not have separate legal personality and operates on the basis of a contract between the management company and the investors, who own shares representing proportional participation in the fund’s assets. The pooled funds are invested in various assets such as stocks, bonds, money market instruments, and others, with the goal of achieving returns while spreading risk. Also referred to as common contractual fund.