Mutual funds have been around for years and were created to allow small investors to have their money professionally managed in order to diversify and protect their savings. The funds allowed investors, who were just getting started, to put money away without taking on high risk.
Most company retirement plans utilize mutual funds as their primary investing tool. They are, once again, used as an easy alternative for investing money and having it managed in a diversified manner. Participants can choose from a menu of many funds. Over the years allocation funds, and then target date funds, were created to make investing even easier for people with little or no investing experience. So, mutual funds became a great way for the new investor to get started.