A mutual fund is a collection of money from a variety of investmentors that invests in a diversified portfolio of stocks or other investments. A mutual fund can include investments such as bonds and stocks and in some cases commodities. Funds can specialize in certain sectors such as the technology sector. A mutual fund will be handled by a fund manager and as long as that the fund distributes ninety or percent of the fund’s dividends to its shareholders it will not be taxed at the corporate level.