I have always used the terms synonymously but I think there is technically a different between the two.

For example, given two seemingly similar assets, one is classified a security and the other a fund:

║ Asset ║    Description     ║   Type    ║ Holdings ║ Classification ║
║ ZAG   ║ BMO Aggregate Bond ║ Index ETF ║     1203 ║ FI Security    ║
║ ZDB   ║ BMO Discount       ║ Index ETF ║      261 ║ FI Fund        ║

1 Answer 1



A fund is a pool of money that is allocated for a specific purpose. A fund can be established for any purpose whatsoever, whether it is a city government setting aside money to build a new civic center, a college setting aside money to award a scholarship, or an insurance company setting aside money to pay its customers’ claims.

That's not some "special" definition of fund. That is the (noun) definition of fund.


The term "security" is a fungible, negotiable financial instrument that holds some type of monetary value. It represents an ownership position in a publicly-traded corporation—via stock—a creditor relationship with a governmental body or a corporation—represented by owning that entity's bond—or rights to ownership as represented by an option.

Therefore, in this sense, a fund is a pile of money that has been used to buy a bunch of securities for the purpose of diversification.

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.