Types of Funds
There are dozens of different types of funds. Learn more about the various types of funds.
The Answer to ‘What Are Absolute Return Mutual Funds?’ Depends on…
What is an absolute return mutual fund? As it turns out, the answer to that question isn’t crystal clear. Each company that manages an absolute return mutual fund has a different definition based on the make-up of their fund. But the goal of every absolute return mutual fund is the same -- make money regardless of market conditions with lower volatility than traditional mutual funds.
What is an absolute return mutual fund? As it turns out, the answer to that question isn’t crystal clear. Each company that manages an absolute return mutual fund has a different definition based on the make-up of their fund. But the goal of every absolute return mutual fund is the same -- make money regardless of market conditions with lower volatility than traditional mutual funds.
Variety of Mutual Funds
There are many types and styles of mutual funds. There are stock funds, bond funds, money market funds and balanced funds. Mutual funds allow you to invest in the market whether you believe in active portfolio management (actively managed funds) or you prefer to buy a segment of the market with no interference from a manager (passive funds and index funds). The availability of different types of funds allows you to build a diversified portfolio at low cost and without much difficulty.
There are many types and styles of mutual funds. There are stock funds, bond funds, money market funds and balanced funds. Mutual funds allow you to invest in the market whether you believe in active portfolio management (actively managed funds) or you prefer to buy a segment of the market with no interference from a manager (passive funds and index funds). The availability of different types of funds allows you to build a diversified portfolio at low cost and without much difficulty.
Pros and Cons of TIPS Mutual Funds
TIPS mutual funds offer many advantages to investors. TIPS are bonds issued by the US Treasury that pay a coupon on the adjusted principal of the bond. The bond is adjusted on a semi-annual basis with the rate of the Consumer Price Index (a measure of inflation).
TIPS mutual funds offer many advantages to investors. TIPS are bonds issued by the US Treasury that pay a coupon on the adjusted principal of the bond. The bond is adjusted on a semi-annual basis with the rate of the Consumer Price Index (a measure of inflation).
The Pros and Cons of Target-Date Funds
Target-date funds are often thought of as “set it and forget it” funds. For example if you plan to retire in 20 years, you might buy a target-date fund that matches your time-frame -– a target of 20 years. As you approach your retirement date, the fund moves its allocation to more conservative mutual fund investments and away from riskier mutual funds investments.
Target-date funds are often thought of as “set it and forget it” funds. For example if you plan to retire in 20 years, you might buy a target-date fund that matches your time-frame -– a target of 20 years. As you approach your retirement date, the fund moves its allocation to more conservative mutual fund investments and away from riskier mutual funds investments.
What Is a Closed-End Fund?
Closed-end funds are often confused with, and mistakenly called, mutual funds. A major difference is that closed-end funds behave more like a stock -- the market value is driven by supply and demand for the shares. On the other hand, an open-end mutual fund continually issues new shares to investors and does not trade on an exchange.
Closed-end funds are often confused with, and mistakenly called, mutual funds. A major difference is that closed-end funds behave more like a stock -- the market value is driven by supply and demand for the shares. On the other hand, an open-end mutual fund continually issues new shares to investors and does not trade on an exchange.
What Is a Sector Fund?
A sector fund is a mutual fund or exchange-traded fund that concentrates its investments in a single sector of the market. If you invest in individual stocks and you’re uncomfortable investing in stocks within a particular sector, then you may benefit from sector funds. You can diversify your portfolio by adding the neglected sector via a sector fund.
A sector fund is a mutual fund or exchange-traded fund that concentrates its investments in a single sector of the market. If you invest in individual stocks and you’re uncomfortable investing in stocks within a particular sector, then you may benefit from sector funds. You can diversify your portfolio by adding the neglected sector via a sector fund.
What Is a UIT
Unit investment trusts (UITs) may be the least understood, and certainly least utilized, of all of the US registered investment companies. What's the problem with UITs? Before answering the question, we need to understand the structure of UITs.
Unit investment trusts (UITs) may be the least understood, and certainly least utilized, of all of the US registered investment companies. What's the problem with UITs? Before answering the question, we need to understand the structure of UITs.
A Primer on Treasury Inflation-Protected Securities
Treasury Inflation-Protected Securities are very different from conventional bonds. A conventional fixed rate coupon bond makes coupon payments on the par amount example: 5% annual interest payment on $1,000) and the par amount is returned at maturity of the bond. Not so with TIPS.
Treasury Inflation-Protected Securities are very different from conventional bonds. A conventional fixed rate coupon bond makes coupon payments on the par amount example: 5% annual interest payment on $1,000) and the par amount is returned at maturity of the bond. Not so with TIPS.
What Is a Target Date Fund?
Target date or lifestyle funds can provide an easy way to diversify but can also create problems with your overall portfolio.
Target date or lifestyle funds can provide an easy way to diversify but can also create problems with your overall portfolio.
The Three General Types of Funds
Mutual funds can generally be placed into one of three primary categories: stock, bond or money market. Many investors will diversify their portfolio by including a mix of the three.
Mutual funds can generally be placed into one of three primary categories: stock, bond or money market. Many investors will diversify their portfolio by including a mix of the three.
Socially Responsible Mutual Funds
Mutual funds are the simplest and most common way for investors to participate in socially responsible investing. Several mutual fund families focus exclusively on SRI. Here's a guide to get started.
Mutual funds are the simplest and most common way for investors to participate in socially responsible investing. Several mutual fund families focus exclusively on SRI. Here's a guide to get started.