What are mutual funds primarily designed for?

Mutual funds are primarily designed to pool money from multiple investors to create a diversified investment product that is managed by professional investment managers. This structure allows individual investors to access a broader range of investments than they might be able to manage themselves, effectively spreading risk across various asset classes. By pooling resources, mutual funds can invest in a diversified portfolio of stocks, bonds, or other securities, which can help mitigate the impact of volatility and reduce the overall risk associated with investing.

Professional management is a key feature of mutual funds, as experienced fund managers make informed decisions about asset allocation and security selection based on in-depth research and analysis. This level of expertise is beneficial for investors who may lack the time or knowledge to actively manage their own investment portfolios.

While other options mention various investment types and strategies, they do not encompass the primary objective of mutual funds, which focuses on diversification and professional management rather than specific high-risk strategies or targeted investment in particular asset classes like real estate or commodities.