Mutual funds are a portfolio of investments that are funded by all the investors who have purchased shares in the fund. Therefore, when one acquires shares in a mutual fund, they acquire partial ownership in all the underlying assets that the fund owns. The performance of the fund depends on how the collective assets are doing. Every time that these assets increase in value, so does the value of the shares that the fund owns. Conversely, when the value of those assets goes down, shares decline in their value as well.