An investment fund (mutual fund) pools money from many investors and invests it in a diversified portfolio of assets — stocks, bonds, real estate, or a combination — according to the fund's stated strategy. The fund is managed by a professional fund manager who makes day-to-day investment decisions. Investors own shares (units) in the fund, and the value of those shares rises and falls with the underlying portfolio.
Unlike CDs and T-bills, mutual funds have no guaranteed return. The return is based on the historical performance of the fund (CAGR) and past performance does not guarantee future results. However, they offer access to diversified, professionally managed portfolios with relatively small minimum investments.