The riskiness of a mutual fund is largely determined by the nature of the underlying investments.
A mutual fund is a professionally managed, pooled investment vehicle that allows an investor to purchase many different assets via a single transaction. The riskiness of a mutual fund is largely determined by the nature of the underlying investments. Diversified money market funds are very low-risk. Diversified investment-grade bond funds reflect a moderate level of risk, while stock funds are higher risk.