Understanding Mutual Funds

GDL Nigeria
3 min readOct 7, 2020


Investing for your future

Mutual Funds — How do they work?

Mutual funds are one of the easiest assets to invest in, but most people do not know how to go about it or what it is even about.

Here’s a simple illustration to help you understand the concept.

Remember those times when you and your friends visited the cinema, and everyone had to join money to afford popcorn and drinks?

Or when you all went to the beach and had to contribute to pay for the uber home?

All these purchases were made possible because everyone involved contributed a certain (usually small) amount towards the larger cost.

If you were tasked with buying drinks for everyone, you might not have been able to afford it.

That is exactly what mutual funds are.

Mutual Funds work by pooling funds together

Mutual funds work by pooling your money and that of other investors and investing in secure, high yielding assets/securities that you would not be able to afford on your own.

Mutual Funds and Diversification

The money is invested in a variety of assets, creating a very diversified portfolio.

Everyone knows that the more diverse your portfolio is, the less risk you face with every investment.

Let’s look at it this way, if you were to invest all your money in a company and it folds up after a year, you would have lost all your investments.

But if you break that money down and invest in fifty companies instead, if one of those companies folds up, it will not faze you.

That is one of the advantages of having a diversified portfolio.

However, for a mutual fund investment to be profitable, it must be managed by professional fund managers who make sure to invest in safe and high yielding assets on your behalf.

We have made it easy for you to invest in mutual funds with the GDL Money Market Fund.

Money Market Funds are high-quality investments in securities issued by the government (treasury bills and bonds) or corporations (commercial papers). They are extremely secure.

The best thing about our money market fund is that you can keep adding to your investment regularly, your money is readily available to you.

We have a team of experienced fund managers who are skilled in the art of investing and dedicated to investing for your benefit.

The money is invested on your behalf and the returns are paid straight into your bank account upon your request.

You do not have to bother with the stress of picking the perfect investment or watching it constantly. We are here for you.

We are fully regulated and recognized by the Nigerian Stock Exchange (NSE) and the Securities and Exchange Commission (SEC); the safety of your money is our priority.

Join thousands of other investors in our Money Market Fund starting at N10,000.

Start your journey to financial freedom here.



GDL Nigeria

A leading diversified financial institution creating wealth and transforming society.