A mutual fund is a pool of investors' money invested in various securities as determined by the fund's objective.
Mutual funds have several unique characteristics.
A mutual fund must redeem shares at the net asset value. Each investor in the mutual fund's portfolio owns an undivided interest in the portfolio. All investors in an open-end fund are mutual participants. No one investor has a preferred status over any other investor because mutual funds issue only one class of common stock. Each investor shares mutually with other investors in gains and distributions derived from the investment company portfolio.