Also found in: Dictionary.
Related to Asset-Backed Fund: Asset Backed Commercial Paper
A mutual fund that invests in real estate, equipment, stocks and other tangible assets. The advantage to an asset-backed fund is the fact that the assets behind it have liquidation value (that is, if a company fails, one can sell the company's equipment or real estate to cover a portion of the investment). Funds that invest in bonds and other debt securities do not necessarily have this advantage.