What is the meaning of ' mutual fund'?

mutual fund is a pool of money that is invested by a manager for people who have contributed to the pool. It allows small investors to own a diversified portfolio of securities with a relatively small investment.

A mutual fund is an organization that receives member's money for the purpose of investing in the stock and bond markets. By collecting money from many individuals, the fund can buy a diversified portfolio of securities. Any one member may be able to buy only one or two stocks with his money, which means he has to assume a high degree of risk. By investing through a mutual fund, the risk is reduced because a small investment can be spread over many stocks.

Mutual funds are operated by managers who are supposedly experts in trading securities. They charge fees which are usually a percentage of the amount of money managed, and because they are experts, the fund should earn better returns than individual investors can earn who are not investment experts. However, most funds earn only average returns. Some do well one year but not as well another year.

For many small investors who are not familiar with the stock market, a mutual fund investment makes sense. Many funds have specific goals, such as investing for income, or for growth of capital, or investing in real estate, etc., so an investor can choose one or more funds that suit his investment goals.

a mutual fund is a form of collective investment that pools money frm many investors n invests the money in stocks, bonds, short-term market instruments, and/or other securities.
in a mutual fund, the fund manager trades the fund's underlying securities, realizing capital gains or loss, and collects the divident or interest income.
the investment proceeds r then passed along 2 the individual investors.

In a simple way to explain the Mutual Fund is,
The contribution of so many peoples money to one AMC ( asset management company) and in turn the AMC will invest in share
market using their expertise and techniques of share investment.

The returns of the collective share that AMC hold for that
particular fund scheme will be distributed to the Mutual fund
unit holders as dividend in dividend fund and accumulated
in growth fund, depend upon the investment the invester choose.

A mutual fund is simply a financial intermediary that allows a group of investors to pool their money together with a predetermined investment objective. The mutual fund will have a fund manager who is responsible for investing the pooled money into specific securities (usually stocks or bonds). When you invest in a mutual fund, you are buying shares (or portions) of the mutual fund and become a shareholder of the fund.

Mutual funds are one of the best investments ever created because they are very cost efficient and very easy to invest in (you don't have to figure out which stocks or bonds to buy). If you would like to know the history of mutual funds.
By pooling money together in a mutual fund, investors can purchase stocks or bonds with much lower trading costs than if they tried to do it on their own. But the biggest advantage to mutual funds is diversification.

some more information is available at the following link
http://mutualfunds.about.com/cs/building...

Mutual fund is a trust which collects money from the investors and invests in different securities like shares , bonds and debentures and return through these investment is returned back to the investors as per their unit holdings.