Investing Unit 4: Equity Mutual Funds



Mutual funds are professionally managed portfolios of securities and are described in detail in Unit 6. Options available for equity investors, include:


  • Growth Funds – funds that typically invest in the stock of well-established companies with an objective of capital appreciation.
  • Aggressive Growth Funds – funds that invest in new companies without a track record or funds that use risky trading actions.
  • Equity-Income Funds – funds that invest in the stock of companies that are known for their payment of above-average dividends.
  • Focus Funds – funds that invest in a small number (e.g. 20 or 30) of stocks instead of the 100+ securities typical of most funds.
  • Global Funds – funds that invest in stocks worldwide, including those issued by companies located within the United States.
  • Emerging Markets Funds – funds that invest primarily in the stock of developing countries.
  • Gold Funds – funds that invest in gold mining companies or related securities (e.g., precious metals).
  • Index Funds – funds that include stocks that comprise a benchmark market index such as the Standard & Poor’s 500 or Wilshire 5000.
  • Sector Funds – funds that invest entirely or predominantly in a single economic sector (e.g., technology and health care).
  • Socially Conscious Funds – funds managed for capital appreciation that screen out certain securities based on designated social priorities (e.g., eliminating companies with poor environmental records).
  • International Funds – funds that invest only in stocks issued outside of the United States.
  • Momentum Funds – funds that invest in companies that are “hot” at the moment but tend to be very volatile as share prices change.
  • Regional Funds – funds that concentrate on companies located in one part of the world (e.g., Europe, Asia).