There are managed mutual funds and index funds. Managed funds are run by a manager who decides what he or she is going to buy and sell with the money in the fund. When you buy a managed fund, it is important to not only keep track of your fund but also of the manager who's responsible for the fund. Check to see how long they have been in charge. The managers ultimately create a fund's track record so they are the one you want to follow.
Index funds are the other type of funds available for purchase.
These are great when you don't know which mutual fund to buy and don't want to learn about the funds or their managers. There are several indexes that track the values in the stock market and when the stocks go up in an index, so does the index's average. The Dow Jones average is based on 30 stocks. These are two most widely quoted indexes. Mutual funds constantly compare their performance to the various indexes.