A fund is a sum of money that gets collected and used for a specific purpose. When investing in a mutual fund, youre investing in the fund mutually along with tons of other people and in return, depending on how much you invested, you are part owner.
Example: There are different types of mutual funds, including growth funds and income funds. If you invest in an income mutual fund, for example, youll be investing in stocks that pay out regular dividends (i.e. generating you income) rather than aiming for the long-term growth that growth stocks provide.