Types of Mutual Funds

1. Money Market Funds Money market funds invest in short-term fixed income securities. Example of short-term fixed income securities would be government bonds, Treasury bills, commercial paper, and certificates of deposit. These types of fund are generally a safer investment but with a lower potential return than other mutual funds. 2. Fixed Income Funds Fixed income funds buy investments that pay a fixed rate of return. This type of mutual fund focuses on getting returns coming into the fund primarily through interest. 3. Equity Funds Equity funds invest in stocks. Furthermore, there are different types of equity funds such as funds that specialize in growth stocks, value stocks, large-cap stocks, mid-cap stocks, small-cap stocks, or a combination of these stocks.