#mutual funds #types of mutual funds #4 types of mutual funds
@Jack.Penn · Posted 05 Dec. 2022
@Frank.Lucas · Updated 05 Dec. 2022
If you're looking to invest in a mutual fund, it's important to know about the different types of mutual funds available. Here are 4 of the most common types of mutual funds:
· Index funds
· Actively managed funds
· Target-date funds, &
· Money market funds
Index funds are a type of mutual fund that track a specific market index, such as the S&P 500. Index funds can typically be a good choice for the average investor because they have a lower expense ratios than actively managed funds.
Among the 4 types of mutual funds , balanced funds are a type of mutual fund that invest in a mix of stocks, bonds, and other securities in an attempt to achieve a balanced portfolio.
Actively managed funds are a type of mutual fund that are actively managed by a team of professional investors. The goal of actively managed funds is to outperform the market benchmarks.
Target-date funds are a type of mutual fund that invest in a mix of stocks, bonds, and other securities based on a target date. For example, a target-date fund for someone retiring in 2025 would invest differently than a target-date fund for someone retiring in 2030.Money market funds invests in short-term debt instruments, for e.g. Treasury bills and commercial paper. Money market funds are typically used as a cash management tool.