What is a common characteristic of mutual funds?

Mutual funds are designed to pool money from multiple investors to create a diversified investment portfolio, and one of the key benefits of mutual funds is that they offer professional management of investments. This means that the funds are managed by experienced investors and financial professionals who make decisions about which securities to buy and sell, based on extensive research and market analysis. This professional management helps to alleviate the burden of investment decisions from individual investors, allowing them to benefit from the expertise and strategies of those who manage the fund.

The consideration of investment risk is important, but mutual funds can vary widely in terms of risk levels, depending on their investment focus. Therefore, stating that they are usually high-risk investments does not capture the full spectrum available to investors. Additionally, while mutual funds can be used within retirement plans, they are not limited to those plans and can be purchased independently through brokerage accounts. Lastly, almost all mutual funds come with management fees, operational fees, or other expenses which contribute to the overall costs of investment; stating that they have no fees associated with them is inaccurate. Thus, professional management is a defining and advantageous characteristic of mutual funds, making it the correct choice.