Mutual Fund, is a form of management-investment company that combines the money of its shareholders and invests those funds in a wide variety of stocks, bonds, and so-called money market instrument. Mutual funds is a growing branch of investment in Nigeria.

In a mutual fund, the fund manager, who is also known as the portfolio manager, trades the fund's underlying securities, realizing capital gains or losses, and collects the dividend or interest income. The investment proceeds are then passed along to the individual investors. The value of a share of the mutual fund, known as the net asset value per share (NAV), is calculated daily based on the total value of the mutual fund divided by the number of shares currently issued and outstanding.

Mutual funds are, by definition, diversified, meaning they are made up a lot of different investments. That tends to lower your risk (avoiding the old "all of your eggs in one basket" problem).

Mutual funds can invest in many different kinds of securities. The most common are cash, stock, and bonds, but there are hundreds of sub-categories. Stock funds, for instance, can invest primarily in the shares of a particular industry, such as technology or utilities. These are known as sector funds.

Mutual fund managing agencies are begining to resurrect in the nigerian market. Infact, it is the new branch of products being offered by nigerian banks. Known mutual fund mangers include

• The Discovery Fund
• IBTC Nigeria Asset Managers
• Fidelity Nigeria Fund
• Zenith Funds
• Coral Growth Fund