A mutual fund is an investment vehicle that pools money from many investors to purchase a diversified portfolio of stocks, bonds, or other securities. Professional fund managers make investment decisions on behalf of the investors.

Mutual funds work by collecting money from many investors and investing it in a variety of securities. The fund's performance is reflected in its Net Asset Value (NAV), which represents the per-share value of the fund. Investors can buy or sell shares of the fund at the current NAV.

There are several types of mutual funds, including equity funds (invest in stocks), bond funds (invest in fixed-income securities), balanced funds (mix of stocks and bonds), index funds (track a specific market index), and sector funds (focus on specific industries).

Advantages include professional management, diversification, liquidity, convenience, and the ability to start investing with relatively small amounts of money. Mutual funds also offer various investment strategies to suit different risk tolerances and financial goals.

Choosing the right mutual fund depends on your financial goals, risk tolerance, and investment horizon. Consider factors such as the fund's investment objective, historical performance, expense ratio, fund manager's experience, and the fund company's reputation. It's often helpful to consult with a financial advisor.

An expense ratio is the annual fee that mutual funds charge their shareholders. It's expressed as a percentage of the fund's average net assets. This fee covers the fund's operating expenses, including management fees, administrative costs, and other expenses. Lower expense ratios generally mean more of your money is being invested.

Yes, mutual funds can be an excellent choice for beginners. They offer professional management, diversification, and the ability to start investing with small amounts. However, it's important to understand the risks involved and choose funds that align with your financial goals and risk tolerance.