When an individual contributes to a mutual fund, they are essentially purchasing shares in the fund, with the value of these shares determined by the fund’s current net asset value (NAV). The NAV is determined by dividing the total worth of the fund’s assets by the number of shares available. Mutual funds are a favored choice for investors looking for a professionally managed, diversified investment option that offers high liquidity and transparency. Nonetheless, mutual funds carry risks, and investors must thoroughly evaluate their investment objectives, risk comfort level, and investment timeline before committing to mutual funds.