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LogoutInvestment banks collect money from an investor and then this pool of money is invested into the stock market or any other project, this is known as a mutual fund. Usually, the commission of the broker is 1-2 %.
Just like we invest in FD, PPF, STOCKS etc and get returns depending on the features and conditions of that particular investment option. Mutual Fund is also one of the best investment instruments.
Mutual Funds are a collection of stocks or bonds that a fund manager has purchased on your behalf. The fund manager decided which or how stocks or bonds to buy. The mutual fund then distributes the entire amount in small divisions known as units. You, as an investor can buy these small units instead of directly purchasing stocks.