True or False: Mutual funds are insured by the FDIC.

Mutual funds are not insured by the Federal Deposit Insurance Corporation (FDIC). This is because the FDIC primarily protects deposit accounts held at banks and savings institutions, such as checking and savings accounts, up to a certain limit. In contrast, mutual funds are investment products that pool money from multiple investors to purchase a diversified portfolio of stocks, bonds, or other securities. The value of a mutual fund can fluctuate based on the performance of the underlying investments, and there is no guarantee that investors will not lose money.

Additionally, even though some mutual funds may include a money market component, this does not mean that the fund itself is insured. Money market funds can offer some level of safety and liquidity, but they are not considered to be FDIC-insured. The same applies to mutual funds held within retirement accounts; while these accounts may have tax advantages, the underlying mutual funds are still subject to market risks without FDIC insurance. Thus, the statement that mutual funds are insured by the FDIC is false.