Investing in a mutual fund is considered to be an indirect form of financing. When an individual invests in a mutual fund, they are pooling their money with other investors, and the mutual fund company uses that pooled money to invest in a diversified portfolio of securities such as stocks, bonds, or other assets. The mutual fund then returns any gains or income to the individual investors. Therefore, the investors indirectly finance the companies in which the mutual fund invests through their investment in the fund.
