Introduction to Types of Mutual Funds
Investors have more mutual funds available to them than there are corporations issuing stocks and bonds. Mutual funds can be categorized by their investment objectives: whether they are growth, income, balanced, or variations of these. They are also often classified by the area of the market in which they invest, such as stocks or municipal bonds. Some are also classified according to specific industries, such as energy, biotech, or natural resources.
Understanding how mutual funds are categorized and classified will help you pick and choose funds better suited to your own investment objectives and financial goals. Choosing funds based upon their objectives and markets is a good way to assure that the funds will match your own needs.