The majority of investment activities is carried out by institutional investors, including mutual funds.
They buy and sell large quantities of shares and get preferential treatment on trade commissions. Although everyone can try investing for him or herself, investment is a profession and requires professional knowledge and expertise, as well as resources.
With a certain degree of share concentration, some mutual funds may even seek board seats of their portfolio companies and try to exert a more active role in corporate governance. As a result, funds can have more control over their investments and that often leads to better investment performance.
[Read more…] about Why Invest in Mutual Funds and What They Are