Different Types of Mutual Funds and Their Investment Objectives :: Business Finance Investment

Different Types of Mutual Funds and Their investiture ObjectivesMutual farm animals are an investment vehicle which pools the money of some(prenominal) investors. The lineages manager uses the money collected to purchase securities such as stocks and draws. The types of coarse bullion vary according to the funds investment target area. A funds investment objective will usually seek capital gains, income, or a compounding of both. The basic types of monetary resource are described below. The first types of mutual fund I will discuss are notes Market Funds. Money market funds seek safety of the principal by expend in high quality, short securities. This type of fund is designed so that the investors principal should not decrease in value. However, there is no stock-purchase warrant that this will always be the case. A money market fund seeks to provide a regular distribution of income which is determined by short-term interest rates. The second types of mutual funds are bring together Funds. Bond funds carry more risk than money market funds and are often used to produce income (retirement) or to help energise a portfolio (diversification). The primary types of bond funds are municipal bond funds (issued by state and local governments), corporate bond funds (debt obligations of U.S. corporations), mortgage-backed securities funds (securities representing residential mortgages), and U.S. Government bond funds (U.S. treasury or government securities).