What is a common feature of mutual funds?

Mutual funds are designed to pool money from multiple investors to create a single portfolio that can invest in a variety of asset classes, such as stocks, bonds, and other securities. This pooling allows for diversification, which is a key benefit of mutual funds. By holding a mix of different assets, mutual funds can help reduce risk because the performance of one investment can offset another, thus protecting investors against significant losses if one particular asset or sector performs poorly.

Diversification is especially important for individual investors who may not have the resources or expertise to build a diversified portfolio on their own. With a mutual fund, they can access a broad array of investments, benefiting from professional management and economies of scale.

The other options describe features that are not universally true for all mutual funds. For instance, while some mutual funds may focus on corporate bonds, many invest in a wide variety of asset types. Also, mutual funds can target both domestic and international investments, depending on their specific focus. High fees are not a common feature for all mutual funds, as there are various types available, including low-cost index funds and ETFs.