Mutual funds pool money from many investors to purchase securities like equities, bonds, and other assets. This allows small investors access to a professionally managed portfolio. The money is invested in securities and the returns generated are given back to investors. The history of mutual funds in India started in 1964 with the establishment of UTI as the first mutual fund. Later, other public and private sector funds were introduced. Mutual funds offer advantages like professional management, transparency, diversification and liquidity but also have disadvantages like market risk, no guarantee of returns, and potential for unethical practices.