How does mutual funds work?

Mutual funds is a pool of investment such as stocks, bonds or government securities owned by group of investors. It's mainly managed by professional team mainly called fund manager. It can be of two types with respect to investment. 1) Open End Mutual funds 2) Close end mutual funds. Open end mutual funds instument is called units and close end mututal funds are called certificates. 

Mutual funds can be of different type with respect to classification of investment i.e. Equity Funds / Stock Funds, Money Market Funds, Pension Funds, Cash Funds e.t.c