Different kinds of mutual funds

Mutual fund usually called for open-end investment company. Open-end mutual fund is most favorite’s investment company in US. At the end 1999, there are more than seven thousand mutual companies in US. Fidelity, Vanguard, Putnam, Dreyfus etc is the most well-management mutual fund company.

Which one is the best? It is depend on your view. Your aim investment may determine which funds fit with you.

There are types based on mutual fund investment policies are:

Equity funds, Mutual funds that invest in equity funds like stock. This fund is suitable for investors who like capital gain and dividend. Sometimes investment manager buy little portion fixed-income securities. Fixed income securities support mutual fund company to steady when investor liquidate the funds suddenly.

Equity funds differ on income fund and growth fund. Income fund refer to company stock with dividend, other side growth refers to focusing on capital gain.

Fixed income securities, Investment manager use fixed income securities for investing investor money. This mutual fund is ideal for medium term and long-term investor who want to avoid risk like pension, old officer, etc. Some companies invest their assets to specific fixed income securities like Municipal Bond, Government Bond, Debentures, Commercial Papers, Corporate Bond, T- Bills, etc.

Money market funds, Investment manager invest funds at highly liquidity money market instrument. They may put money at foreign currency certificate deposit. This fund is liquid. This fund is suitable for short-term investor like corporate and other business organization.

Balanced and Income Funds (hybrid), mutual funds that invest money at various investment vehicles likes bond, stock, money market, index, etc. Investment manager construct best portfolio to get higher profit. This fund fit with moderate investor. This fund is ideal for medium and long term.

Assets Allocation funds, Similar with balanced and Income Funds. Investment manager find to design high investment vehicle.

Index Fund, This fund buys index. Index represents index performance in capital market. E.g., S&P 500 Index fund is mutual fund represent S&P 500 Index. There is also other index like Dow Jones, NASDAQ, Wilshire 500, etc.

Specialized sector fund, your investment manager invest in industry like biotechnology, utilities, telecommunication, precious metal (Gold & Silver), etc.