A mutual fund is a next generation investment tools made up of a pool of amount collected from many retail and institutional investors for the purpose of investing in various securities i.e. stocks, bonds, money market etc. Mutual Funds are operated by professional money managers, having huge experience and professional skill.
Mutual funds give small or individual investors access to professionally managed portfolios. A fund's NAV is derived by dividing the total value of the securities in the portfolio by the total amount of shares outstanding.
Mutual funds pool money from the investing public and use that money to buy other securities, usually stocks and bonds.