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Definition: a Mutual Fund is a collective investment vehicle where money is pooled from many investors in a single basket and the entire basket is invested by the investment company ("Asset Management Company" (AMC)) in a securities market. Profit and losses earned are reflected in the NAV (Net Asset Value).

Typically, in return for an initial shareholder fee plus annual operating expenses, the portfolio manager trades the fund's underlying securities, realizing a gain or loss, and collects the dividends and interest income.