A Mutual Fund is a pool of money collected from small investors having a fund manager who manages the fund with predetermined investment objective. The fund manager invest the pool of money in specific Securities (stocks and bonds). When a person invest in mutual fund he becomes a unit holder or share holder of the fund and units are alloted to him. When the fund generate profits it is passed to unit holders of the funds.
Investment in Mutual Funds are considered as one of the best investment option as it is very cost effective and it is also easy for investor to invest because a large fund has to pay a lower trading cost as compared to retail investor.
The best part of Mutual Fund is its diversification which minimizes the risk and maximize the returns.
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