Which of the following is considered an indirect investment?

Indirect investment refers to investing in assets through a financial vehicle that manages those assets on behalf of the investor. When you purchase shares in a mutual fund, you are not directly acquiring the underlying securities such as stocks or bonds. Instead, you are buying units of the mutual fund, which in turn pools money from many investors to invest in a diversified portfolio of assets managed by professional fund managers. This structure allows investors to gain exposure to a range of securities without having to manage each investment personally, making mutual funds a clear example of indirect investment.

In contrast, direct investments such as purchasing real estate, company shares, or bonds involve directly owning the asset itself. These direct investment choices provide the investor with ownership rights and responsibilities associated with these assets, which is not the case with mutual funds. Thus, the correct answer highlights the nature of mutual funds as a means of achieving investment returns through indirect ownership of a diversified portfolio managed by professionals.