Common contractual fund

Imagine you and your friends like to play together and you want to buy toys that you can all play with. However, you don't have enough money to buy all the toys individually. So, you and your friends decide to pool your money together and buy the toys as a group.

In the grown-up world, this is similar to what happens with a common contractual fund. People who want to invest their money pool it together in a big pot, which is called the fund. The fund manager then invests that money in different things like stocks, bonds, and property.

By pooling your money together in the fund, you can spread your investment risk across many different things, instead of just buying one thing. This means that if one investment doesn't do well, you still have other investments to rely on.

In addition, by investing in a common contractual fund, you get the benefit of the fund manager's expertise. They are responsible for making sure the money in the fund is invested in the best way possible to make a return for investors.

Overall, a common contractual fund is a way for people to invest their money together in a diverse portfolio and benefit from the expertise of a fund manager.