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A mutual fund is essentially a collection of stocks and/or bonds. Investors can earn money from a mutual fund in three primary ways. Firstly, income is generated from dividends on stocks and interest on bonds, which the fund distributes to its investors throughout the year. Secondly, if the fund sells securities that have increased in price, it realizes capital gains, which are often passed on to investors as distributions. Finally, if the fund's holdings increase in value but are not sold by the fund manager, the fund's shares increase in price, allowing investors to sell their mutual fund shares for a profit. This multifaceted approach to generating returns makes mutual funds a versatile investment option for individuals seeking to grow their wealth over time