A mutual fund is an investment tool that pools money from investors and invests it in stocks, bonds, and other securities. Investors share the earnings and capital gains proportionate to their investment. Mutual funds offer diversification, professional management, low costs, liquidity, and other advantages. There are various types of mutual fund schemes categorized by structure, investment objectives, and other factors to suit different investor needs. Key terms include NAV, sale price, repurchase price, sales load, and repurchase load.