What is the primary function of a mutual fund custodian?

The primary function of a mutual fund custodian is to reserve and hold the fund's money from all sources. This role is crucial in the financial industry as custodians are responsible for the safekeeping of the mutual fund's assets, including cash, securities, and other investment instruments. They ensure that these assets are protected, maintained, and properly accounted for. Additionally, custodians perform important administrative functions, such as settling trades, collecting dividends and interest payments, and providing reporting to the fund manager and regulators. By securely safeguarding the assets, custodians help to avoid issues such as fraud or misappropriation, thereby supporting the integrity of the mutual fund's operations.

In contrast, the other options outline roles that are not typically associated with custodians. Investing the fund's money actively falls under the purview of the fund manager, who decides on the investment strategy and manages asset allocation. Providing financial advice is also a function carried out by financial advisors or portfolio managers, rather than custodians. Lastly, marketing the fund to potential investors is a task usually undertaken by the fund's marketing team, as custodians focus primarily on asset safety and operational integrity, not on promotional activities.