What is a mutual fund? An investment vehicle that contains a pool of assets.

A mutual fund is an investment vehicle that allows small investors to pool their money to buy a collection of stocks, bonds, or other assets.

Mutual funds are managed by professional investors and are regulated.

Mutual funds are good diversification tools; through them a small amount of money can access a large variety of investments.

See: http://guides.wsj.com/personal-finance/investing/what-is-a-mutual-fund/ for more.