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LSDefine
Simple English definitions for legal terms
changing fund
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A quick definition of changing fund:
A changing fund is a type of money that is invested and reinvested periodically. It is usually a trust fund that changes its form as it is invested. Other types of funds include a general fund, which is a government's primary operating fund, and a sinking fund, which is a fund consisting of regular deposits that are accumulated with interest to pay off a long-term corporate or public debt.
A more thorough explanation:
A changing fund is a type of trust fund that periodically changes its form as it is invested and reinvested. This means that the assets in the fund are not fixed and can vary over time. For example, the fund may start with stocks and then switch to bonds or other investments.
One example of a changing fund is a mutual fund. Mutual funds pool money from many investors and use it to buy a diversified portfolio of stocks, bonds, or other securities. The value of the fund changes as the value of the underlying securities changes.
Another example of a changing fund is a college savings plan. These plans allow parents to invest money for their child's education and typically offer a range of investment options, such as stocks, bonds, and money market funds. The investments can be changed over time as the child gets closer to college age.
Overall, changing funds are designed to provide flexibility and potential for growth over time. However, they also come with risks, such as fluctuations in the market and changes in investment strategies.