Most people have heard of a fund. Mutual fund is the most common kind, exchange traded funds (ETF, for short) are close behind.
What you want to understand about a fund, is that it can be made of anything. A fund is really just a sort of holder for actual investments that the fund owns.
When somebody tells me their investments are in “mutual funds”, this doesn’t actually tell me anything about the types of investments they have. A mutual fund can own stocks, bonds, a particular sector, particular geography, you name it.
Similar to stocks, it helps to know why they exist to understand them. Back in the days before Robinhood, it cost a lot to buy shares of stock, and often you had to buy a “round lot”, 100 at a time. This was onerous and expensive, and with information about stocks hard to come by, assembling a portfolio was difficult and expensive.
Enter the mutual fund. A group of people pool their money to buy many different securities, usually stocks and/or bonds, and to have a manager manage it. That’s all it is.
You can have a fund that buys the 500 biggest US companies, and that’s all it does, or you can have a fund where the manager is trying to outperform a target (usually called the “index”). You can have a fund that only invests in biotechnology, or a fund that only invests in bonds from Japan.
A fund is just a convenient way to own a whole bunch of things at once.