A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests typically in investment securities such as stocks, bonds, money market instruments, other mutual funds, and/or commodities. It is a financial intermediary that enables a group of investors to pool their money and facilitates accelerated investment activity. When investing in a mutual fund, one is buying units or portions of the mutual fund and the investor becomes a shareholder or unit holder of the fund. The biggest advantage of mutual funds is diversification, by minimizing risk and maximizing returns.