What are Mutual funds?

• Mutual funds are investment companies that pool money from investors at large and offer to sell and buy back its shares on a continuous basis and use the capital thus raised to invest in securities of different companies. 
• The mutual fund will have a fund manager that trades the pooled money on a regular basis. 
• The net proceeds or losses are then typically distributed to the investors annually. 
• A company that invests its clients' pooled fund into securities that match its declared
  financial objectives. 
• Asset management companies provide investors with more diversification and investing options than they would have by themselves. 
• Mutual funds, hedge funds and pension plans are all run by asset management companies.
• These companies earn income by charging service fees to their clients.