A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money collected in the process is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciation realised are shared by its unit holders in proportion to the number of units owned by them. Mutual Funds are managed by Asset Management Companies, commonly referred to as AMC's that employ experts called Fund mangers who put in their expertise to invest the funds in a prudent manner. The biggest advantage of a Mutual Fund is the fact that beginners in the markets get to put in their money(however big/small the amount may be) in the stock markets.Based on the investment options that the fund manager may offer and the risk-return appetite of an investor, he/she may choose a mutual fund that caters to their needs. Mutual Funds today are a preferred investment avenue. The reason why they are popular is that they let you enjoy the benefits of considerable tax savings as well as facilitating a well-diversified and professionally managed portfolio.