from the fund. Since the goal is not capital appreciation, the associ- ated risk for income funds is relatively lower than that for growth or aggressive growth funds.
GROWTH AND INCOME FUNDS.
A mix of the income equity and
growth funds, these funds strive to invest in firms that will show pos- itive growth and income (dividends) rates in the future, as well as providing some good dividend income in the present. The risk level for these funds tends to be moderate because of the balance between
the growth and income factors.
These funds tend to invest in the com-
mon stock of firms that pay reasonable current dividends. However,
they also try to increase the income options on the stock they hold.
GLOBAL EQUITY FUNDS.
stock of both foreign and U.S. companies.
Special note: It’s important to distinguish between interna- tional and global mutual funds. Global funds invest in Ameri- can companies, as well as foreign companies, whereas international funds invest solely in foreign companies.
INTERNATIONAL EQUITY FUNDS.
International equity funds are
Small-cap funds are made up of smaller,
lesser-known companies that the mutual fund thinks show great promise and will grow substantially over a few years. While many people think that small-cap stocks have performed better than other sectors have, small-cap funds, like the underlying small-cap stock, have fewer capital resources, and are known to be more volatile than their larger counterparts.
PRECIOUS METALS FUNDS.
Rather than investing individually in
companies that produce precious metals, or gold-mining companies,