Which of the following is a characteristic of mutual funds?

Mutual funds are investment vehicles that pool money from many investors to purchase a diversified portfolio of stocks, bonds, or other securities. One of the key characteristics of mutual funds is that they manage money on behalf of shareholders. This means that investors buy shares in the mutual fund, and the fund's manager is responsible for making investment decisions aimed at achieving the fund's objectives, which could include growth, income, or a combination of both.

The management aspect is crucial because it provides investors access to professional portfolio management services, diversification across various assets, and the potential for better risk-adjusted returns compared to individual investing. The fund's performance is tied to the performance of the underlying assets, which the manager actively oversees.

This characteristic distinguishes mutual funds from individual stocks (which are single company shares) and from other investment options that might focus on a specialized area, like only government securities or solely real estate investments. In addition, mutual funds can encompass a wide range of investment strategies and asset classes, not limiting themselves to any specific sector or type of investment.