Investing
Mutual fund
Also known as: MF
A pool where many investors money is collected and invested by a fund manager across many stocks or bonds.
A mutual fund pools money from thousands of people and a professional manager invests it based on the fund's goal, like large company stocks or government bonds.
You own units of the fund, not the individual stocks. Your unit value goes up and down with the underlying investments.
It is the simplest way for a normal person to own a diversified basket without picking stocks yourself. You pay a small yearly fee called the expense ratio for this.
For example
With ₹500 in an equity mutual fund, you indirectly own tiny slices of 50+ companies like Reliance, HDFC Bank and TCS at once.