Mutual Fund

A mutual fund is an investment scheme that pools money from many investors under one fund company to meet a specific financial objective. The fund managers then use that pooled money to buy securities such as stocks or bonds. Unit trusts are closely related, but a mutual fund issues redeemable shares while a unit trust issues units. In Asia, a unit trust is essentially the same as a mutual fund.

It is like many people putting money into one big pot, and a manager uses that pot to buy investments for everyone together.