A Mutual Fund is a professionally-managed trust, where the savings from many investors are collectively invested as one. This money is then invested in various securities such as stocks, bonds, short-term money market instruments and commodities such as precious metals.

Though popular among many individuals, mutual funds have their own advantages and disadvantages.
Advantages of mutual funds
1) Advance Portfolio Management
2) Dividend Reinvestment
3) Risk Reduction (Safety)
4) Convenience and Fair Pricing.