Mutual funds are a form of collective investment that allows investors with similar investment objectives to pool their funds to be invested in a portfolio of securities or other assets. A professional fund manager then invests the pooled funds in a portfolio which may include various kind of the asset classes for instance cash, bonds & deposits, stocks, property, commodities, etc.

Unitholders do not purchase the securities in the portfolio directly. Ownership of the fund is divided into units of entitlement. As the fund increases or decreases in value, the value of each unit increases or decreases accordingly. The number of units held depends on the unit purchase price at the time of investment and the amount of money invested.

The return on investment of unitholders is usually in the form of dividends and capital gain, derived from the portfolio. Each unit earns an equal return, determined by the level of distribution in any one period.

Mutual fund investors are typically those with savings to invest, who neither have the time nor investment expertise. Rather, they prefer to invest in an investment vehicle which suits their purposes and risk appetites. Mutual funds allow investors to have easy access to a wide range of investment exposures not normally available to them.

As investors seek to maximize returns on their financial resources, Mutual funds provide an ideal way to gain exposure to investments that, in the long run, should produce returns superior to cash savings and fixed deposit investments