A mutual fund is a professionally managed trust that pools funds of many investors and invests them in stocks, bonds, short-term money market instruments and commodities such as precious metals etc. Each mutual fund has a common financial goal and invests funds in different asset classes based on this investment objective.
Mutual funds are professionally managed and well diversified to offset potential losses. They offer an attractive way for savings with low fees or requiring constant attention from individual investors. Mutual funds investments are for investors who lack time or knowledge to make difficult investment decisions. In a mutual fund, the portfolio manager makes these essential decisions for you.