What is a Mutual Fund?

A mutual fund is a professionally managed investment vehicle that pools money from multiple investors to invest in a diversified portfolio of securities such as stocks, bonds, money market instruments, or a combination of these assets. The fund manager, who is typically a financial expert or a team of professionals, makes investment decisions on behalf of the investors based on the fund's objectives and investment strategy. Investors in a mutual fund purchase shares, which represent their proportional ownership in the fund's portfolio. The value of these shares, known as Net Asset Value (NAV), fluctuates based on the performance of the underlying securities held by the fund. Mutual funds offer several benefits to investors, including diversification, professional management, liquidity, and accessibility. By pooling resources, investors can access a wide range of securities even with small investment amounts. Additionally, the expertise of the fund manager helps in optimizing...