Mutual funds are a collective investment plan that are managed professionally and acquire cash resources from varied investors in order to purchase securities. One of the most attractive facets of these funds is that they provide a greatly reduced risk for investors because the entire burden of the risk is not focused on just one investor. But the other side of this coin is that the returns on the funds are also divided among the investors. These funds usually invest in a variety of securities which range from equity within companies to government bonds.
