Many investors in the stock market lack the necessary time and knowledge to properly manage their securities portfolios. Mutual funds are designed to solve this problem. Mutual funds are established and managed by securities experts.
Starting a mutual fund in stock market is actually very much like founding a company. A group of investors pool their money, hire a fund manager (fulfilling the role of the manager of a company), and appoint a trustee to supervise the manager (similar to the functions of a board of directors). Also, they will maintain the interests of the owners of units in the fund (similar to a company’s shareholders).