A Mutual Fund comprises of the money pooled in by a large number of people (or investors) who share a common investment objective. This fund is managed by a professional fund manager.
Each investor owns units, which represent a portion of the holdings of the fund and the income/gains generated from this collective investment is distributed proportionately amongst the investors.
Thus, a Mutual Fund is one of the most viable investment options for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.
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