Mutual fund is a pool of money from different investors that is used for buying securities, shares, money market instruments and bonds. Usually, these funds are sold to the general public and are quite often open-ended in nature, which means that the shares of fund can be bought and sold at any time by the holders. These funds are operated by trained professionals known as the fund managers. They invest the capital amount of the fund in various investment vehicles in an attempt to generate good capital earnings for the investors of that particular mutual fund. If profit is gained in a mutual fund, it is distributed among the shareholders of that fund. A mutual fund’s portfolio is made up in such a way to support the investment motives of the shareholders and the future prospects in sight. These funds are of various types depending on what the amount of capital is invested in which investment vehicle.