Investors buy shares in the mutual fund. The price of each share, known as the net asset value (NAV), is determined by dividing the total value of the fund's assets by the number of shares outstanding.

The mutual fund uses the money from investors to buy a diverse mix of securities. This helps to spread the risk of investment across different types of securities and sectors, which can help to minimize the impact of any single security's performance on the overall fund.

The fund's performance is determined by the performance of the securities in the fund's portfolio. If the securities perform well, the value of the fund's shares will increase, and if they perform poorly, the value of the shares will decrease.

The fund's manager is responsible for making decisions about which securities to buy and sell in order to achieve the fund's investment objective. This may include selling securities that are underperforming and buying securities that are expected to perform well.

Investors can buy or sell shares in the mutual fund at any time, and the price of the shares will fluctuate based on the performance of the securities in the fund's portfolio.

The mutual fund company will charge a fee for managing the fund, which is known as the expense ratio, this fee is taken out of the fund's assets, which will reduce the fund's returns for its shareholders.

Mutual funds can be a good option for investors who want to diversify their investments and gain exposure to a broad range of securities without having to research and choose individual stocks and bonds. However, it's important to understand that mutual funds also carries risk, and the performance of the fund can be affected by the performance of the securities in the fund's portfolio and the overall market conditions.