A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciation realised are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.
Mutual fund organization is model of trust who works on basis of no profit no loss. Mutual funds are operated by the trusty and they having professionals i.e. fund manager and their team, who invest the fund's in research based securities, stocks and other instruments for appreciation their fund/ money/capital.
Normally an individual/ small investor not able to take much risk to balance their portfolio, But small investors access to professionally managed, diversified portfolios of equities, bonds and other securities through investment in Mutual fund. A mutual fund's portfolio is design and managed as to match the investment objectives.