Mutual Funds are not new. They originated in Scotland and England in the 19th century, finally coming to America in 1924. The first U.S. Mutual Fund was started by MFS called the Massachusetts Investors Trust, which still operates today. There are also Bond funds, Utilities funds, International and Global funds. The price for each companies stock changes constantly, hopefully going up as the companies grow and expand.
Many companies also pay dividends once a year, which helps increase each share's value.
Some funds are managed by one person and some are managed by a team of people. You give them your money and they invest it by buying shares of stocks, bonds, and other forms of securities. As an investor you own shares in the fund. This guarantees you diversification and some reduced risk. More-so than buying individual stocks on your own.