Mutual Fund

A mutual fund is essentially a collection of money from several investors, which is then invested and managed by some investment firm.

Mutual funds allow you to pool your money alongside other investors and have it managed by some third party. The managers then take all the fund money and invest in a basket of assets. They execute all orders and allow you to experience the returns. While the returns tend to remain constant, higher returns can be seen with individual stocks.

Also see Exchange-Traded Fund (ETF).

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