A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities.

Th investment company you choose is responsible for the management of the fund. When one invests in Mutual funds or MFs you become the owner of a part of the portfolio which will include other shareholders also. Purchasing of shares will put the responsibility of your fund manager to invest it and he counts the value of it, calculates the number of shares purchased and the net asset value is calculated of the mutual fund and the price of a single share of the fund on the day.

If you wish to buy shares you can send the manager the money to purchase and they will give you new shares at the latest price. Basically this goes on and hence it is called 'open end funds'.