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An investment funds is a collection of money pooled together from many individuals to be invested as one cohesive unit on their behalf.
Hedge funds, Mutual funds, Exchange traded funds (ETFs) and the like are all examples of investment funds. Such funds provide the investor the benefit of gaining exposure to a broad range of assets and investment strategies according to the operations of the fund by holding equity in the form of shares. In traditional finance, individuals and institutions are able to enter these investment vehicles by commiting money to the entity and receiving their share of equity in return. The amount of shares received is determined by a valuation mechanism. In the case of mutual funds it is the net asset value, which is calculated after the market closes on any given day. As opposed to a publicly traded security like an ETF, which has an open market price. Such funds have issuance (when capital is commited) and redemptions (when capital is returned), with different rules and standards for size, timeline, etc.
By using smart contracts the operations of such funds can be made more autonomous, transparent, and open. Through the crypto ecosystem a smart contract can contain logic needed in the operation of such a fund. A stablecoin token can replace traditional capital of dollars to enter the fund and shares can be issued (minted) to the investor using a predefined formula based on the operations of the fund.