What is a mutual fund?

A mutual fund is a pooled investment vehicle that collects money from many investors and invests it in a diversified portfolio of stocks, bonds, or other securities. It is managed by professional fund managers who make investment decisions on behalf of the investors. Mutual funds allow individuals to invest in a broad range of assets without needing to buy each one separately. This helps reduce risk and saves time and effort. Investors buy units or shares of the fund, and the value of their investment rises or falls based on the fund's overall performance. Mutual funds are suitable for both new and experienced investors and are considered a convenient way to build long-term wealth.