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Mutual Fund Categories

Many potential investors are discouraged from embarking on investing since they find it hard to understand the many financial terms incorporated in the investment world (like the many mutual fund categories). This makes the help of investment advisors such as firms and brokers necessary as well as the different investment periodicals and books. However, by this article we are going to present you with several terms in plain English, which will greatly facilitate your future investment efforts.

Here is the list.

Small-Cap Growth (SCG)

Small-cap growth funds invest in companies that are considered to grow more relative to other companies in the same industry and thus earn more. Their value is usually less than $1 billion and you have probably never heard of them. But don't worry, they are not worse than the others.

Small-Cap Core or Blend (SCC)

This type of funds usually allocates more than 75% for the investment in small companies. However, the manager is allowed to embark on the investment in larger companies whenever s/he considers the situation beneficial.

Small-Cap Value (SCV)

This type of funds invests in small companies that have proven their steady and reliable performance. Here the managers don't rely on the greater growth of company relative to the other companies from the same industry. This type of investment is advantageous since it provides stocks at beneficial prices that are of small companies, part of smaller sectors.

Mid-Cap Value (MCV)

The managers of these funds invest in medium-sized companies, whose stocks has been undervalued or overlooked by the industry.

Mid-Cap Growth (MCG)

More than 75% are invested in mid-sized companies under this fund. Mid-sized companies are defined as those that are valued between $1 billion and $5 billion smackers. Additionally, the managers of this type of fund search for companies that are believed to outperform the companies in the same industry.

Mid-Cap Core or Mid-Cap Blend (MCC)

Again, more than 75% are invested in mid-sized companies. But in this type of fund, managers seek for companies that are believed to be overlooked by the industry and as a result are being undervalued.

Large-Cap Value (LCV)

This type of fund is investing in huge and mature companies, whose performance has been overlooked by the public. These companies provide their investors steady earnings. Additionally, the price of the stock of such companies is generally considered as a real bargain.

Large-Cap Growth (LCG)

These funds concentrate on the investment into huge corporations that are generally being valued to $5 billion smackers. The fund managers are seeking for companies that are believed to outperform and outgrow the other companies from the same industry.

Large-Cap Core or Large-Cap Blend (LCC)

These funds invest a big portion of the money on large companies. The fund managers are searching for corporations that quickly earn cash. Additionally, corporations that represent overlooked bargains are in the focus of the fund managers.

Multi-Cap Value (MLV)

Fund managers are concentrating on stocks that possess below-average p/e ratios. Additionally below-average growth figures are preferred. The types of companies that represent a target to these funds are of any size.

Multi-Cap Growth (MLG)

The fund managers of these funds search for companies of any size that are expected to outperform and outgrow the companies from the same industry.

Multi-Cap Core or Blend (MLC)

There is no specific target group of companies. They can be of any size or performance. It all depends on the choice of the fund manager.

International (INTL)

The target markets of these funds are located outside of the USA.

Global (GL)

Represent a mixture of both securities within and outside of the US. But, at least 25% of the fund investments are done outside of the US.

Emerging Markets (EM)

These funds invest in developing economies that are expected to grow.

Equity Income (EI)

At least 65% are invested in dividend-paying securities. This is done in order to provide for a greater income generation.

Flexible Portfolio (FX)

The fund managers put money in different types of assets such as bonds, stocks or fixed-income. Additionally, the target companies can be of any size.

Balanced (BAL)

The ratio of stock to bond in this type of investment is approximately 60% to 40%. This type of fund is principal-conserving.

Science and Technology (ST)

The fund managers of this type allocate 65% of the equity portfolio in stocks from the science and technology industry.

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