Pool their investible surplus funds and collectively invest in instruments / assets for a common investment objective.
Optimize the knowledge and experience of a fund manager, a capacity that individually they may not have
Benefit from the economies of scale which size enables and is not available on an individual basis
A mutual fund is a professionally-managed trust that pools the savings of many investors and invests them in securities like stocks, bonds, short-term money market instruments and commodities such as precious metals. Mutual funds are pooled investment vehicles actively managed either by professional fund managers or passively tracked by an index or industry. They offer an attractive way for savings to be managed in a passive manner without paying high fees or requiring constant attention from individual investors.