Mutual funds are a collective investment that is made in stocks, bonds, short term money market investments and securities. As an individual one invests money with the investing company, then that company invests in a huge investment called the mutual funds in the trading market. Mutual funds are common all over the world. There is a fund manager who trades the funds on a regular interval. Mutual funds are subject to special set of rules and tax laws. There are three types of mutual funds: - Open end fund, Exchange traded fund, Equity fund. All mutual funds are redeemable. All funds charge management fees/expenses when you buy or sell the funds that’s their source of income to run the business. The performance of the mutual fund company depends on the performance of the companies the fund is invested in, if the funds did very well one year one cannot guarantee that it will deliver the same results the next year too therefore the regulatory laws are very strict and the mutual fund must disclose their last year’s performance to the investors.