What is Fund Category?
A way of differentiating mutual funds according to their investment objectives and principal investment features. This categorization allows investors to spread their money around in a mix of funds with a variety of risk and return characteristics. Read more for examples and further explanation including related video clips and also comments
Example explains Fund Category
With stock funds, the basic categories are defined by the size of the companies in which the fund invests – large-cap, mid-cap and small-cap – and investment style – value, growth and blend (value/growth mix). Specialty stock funds (real estate, healthcare, etc.) and international funds offer additional opportunities.
Bond funds are categorized principally by their average portfolio maturities – long, intermediate and short – and credit quality – high, medium and low. Municipal and international funds provide additional bond investment diversification.
Hybrid, or asset allocation, funds offer a mix of stock and bond investments and come in two types: conservative and moderate allocation.
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