A mutual fund is a financial mechanism by which pooled resources of multiple investors are invested in different forms of securities. Investors are allotted units for their investments and unit holders share the resulting profits and losses in proportion with their investments. Since the pooled resources are invested in different securities, risk gets diversified and since the investments are done by experienced, professional fund manager, investors are assured significantly better returns at relatively low risk. From time to time, mutual funds come out with different schemes that have varied objectives. And to be eligible to solicit funds from investors, it is necessary that mutual funds are registered with the Securities and Exchange Board of India.