A mutual fund is also known as the open - end fund, which is an investment company that spreads the money by across a diversified portfolio of securities. In the mutual funds, there is a one manager which is also known as portfolio manager that is the fund manager and the trades are underlying the fund's securities, they collect the interest income or dividend and realizing the capital gains or losses.

You can invest the mutual funds in (much) different type of securities. The most common securities are bonds, cash and stock but hundred of sub-categories are also there. Bond funds are varying in according to the risk, which is the type of issuers where as the Stock funds can invest in the shares of a particular industry such as a technology.

Both the bond and stock funds can invest in U.S. securities both U.S. and foreign securities. In the mutual funds, there are three types such as open-end fund, closed mutual funds and other types of investment funds.

The three types of mutual funds are explained below:

Open end funds
Open ended funds are that type of funds which is ended of every day, thus the fund issues take the new shares to investors and buy the share back from investors wishing to leave the fund and the mutual fund is the common name for an open-end funds.

Closed mutual funds
A closed mutual fund is a collective type of investment scheme which is very limited to a number of shares. Closed mutual funds are the financial type of securities that are traded on the stock market.

Bond funds
The accounts for bond funds are 18% of mutual funds assets. High yield types of bond funds are invested in the corporate bonds, which is including the junk bonds and high yield.

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