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What Types of Mutual Funds Are Available?
The following funds are categorized by the attributes of growth, income, and specialized. These represent the six most popular types of mutual funds available to the consumer, and each fund is different because of its defining characteristics. Let's take a look.
| Type of Mutual Fund |
Defining Characteristics |
| Balanced |
* High-return, low-risk strategy
* Consist of common/preferred stocks, bonds, cash reserves
* Not a lot of risk
* Yields greater than pure stock funds |
| Growth and Income |
* Strives for long-term growth and current income through high-yield common stock, preferred stock, bonds
* Not a lot of risk |
| Growth |
* Extended appreciation through stocks of well-grounded companies
* Low dividends
* Riskier than Growth and Income |
| International and Global Growth |
* International = Foreign securities only
* Global = U.S. and foreign securities
* Subject to exchange rates, data collection, reporting, economic, and political differences |
| Aggressive Growth |
* Riskiest growth fund
* Consist of common/preferred stocks, bonds, cash reserves
* Low/No dividends
* Hope for increased capital growth |
| Money Market |
* Invest in liquid securities (short-term debt)
* Consist of common/preferred stocks, bonds, cash reserves
* Ex: Treasury bills, certificates of deposit, etc.
* $1.00 per share net asset
* Not guaranteed or insured |
This information is presented to educate the reader and does not constitute professional tax and legal advice.
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