TYPES of FUNDS

STOCK FUNDS (EQUITY FUNDS) : invests primarily in shares of stocks

Stock Funds According to Investment Objectives:

Equity income funds - have current income as their investment objective and are invested principally in common stocks of companies that give relatively high dividends on a regular basis

Growth funds - attempt to obtain long-term growth of investment capital as their primary investment objective. They are usually invested in common stocks of larger, more established corporations (blue chips), the share prices of which are expected to appreciate over the long term.

Aggressive growth funds - pursue maximum capital gains as their primary investment objective. They are invested aggressively in speculative stocks and tend to stay fully invested at all times.

Growth and income stock funds - seek a high level of current income, some capital appreciation, and preservation of capital as their investment objectives.



BOND FUNDS: invest mainly in long-term debt instruments (or bonds)

Bonds Funds According to Investment:

Corporate bond funds
Government bond funds - invested in Treasury Notes, Treasury Bonds and Agency bonds
Municipal funds - invested in general obligation bonds and revenue bonds


BALANCED FUNDS: invest in both shares of stock and debt instruments.
Generally referred to as total return funds because they combine the current income from bonds and the capital appreciation of stocks.


MONEY MARKET FUNDS: invest purely in short-term (one-year or less) debt instruments.
They may be diversified or specialized by type of money market instruments (prime commercial paper, short-term government securities, repurchase agreements, etc.)


SPECIALIZED FUNDS:

Sector funds - concentrate their investments in a single industry (such as energy, technology, utilities, health care and financial services).

Ethical funds - funds that stress ethics and moral principles instead of strict bottom-line considerations by selecting securities according to various political or social criteria.

Index funds - aim to match the performances of stock market indices

Global Stock funds / International funds