You are also buying the advice of a professional manager, hired by the fund to oversee the fund's portfolio. Of course, the fund manager receives a salary, which becomes part of the fund's fees. But, because of the huge volume of securities they trade, they have access to securities you might not be able to afford on your own and they get reduced commission rates. Before buying shares of a mutual fund, check into the fund manager's track record. They make all the investment decisions, based on the fund's objectives, so you want evidence of a successful management history.
Index funds can add another benefit for mutual fund investors - low management fees.
Index funds buy an aggregate of stocks of a particular asset class. As the fund supervisor doesn't pick stocks and engage in market timing, there is very little active management. Read the Prospectus Make sure to read the fund's prospectus, it contains a world of information on the fund, its investment goals and fees. Mutual funds can be weighted for a specific industry such as technology, or aimed toward investing strategies such as income and growth. Fund research may take some time.