A mutual fund is an investment vehicle that pools money from multiple investors to purchase a diversified portfolio of stocks, bonds, or other securities. This not only provides investors with a way to diversify their investments but also allows them to access a professionally managed portfolio without the need for significant capital. Investors buy shares in a mutual fund, which represent a portion of the holdings of the fund, and profits are distributed based on the shares owned. Mutual funds come in various types, including equity funds, bond funds, and money market funds, catering to different financial goals and risk profiles.