1.1 What's a mutual fund?

A mutual fund is simply a pool of money from a number of investors with similar goals. When you invest in a mutual fund, you buy part of the fund, called a unit. The more money you invest, the more units you receive. Decisions concerning the fund are made by managers. Mutual funds invest in a wide range of securities, notably common and preferred shares, debt securities such as bonds and debentures, as well as money market instruments such as Treasury bills.