One of the most important decisions that investors have to make is what types of mutual funds they want in their portfolio. There are many different kinds, and each has its own advantages and disadvantages. In this blog post, we give a brief overview of the two main categories: equity funds, which invest in stocks; and bond funds, which invest primarily in bonds.
In equity funds, you can choose from three styles: growth (which invests mostly in companies with high earnings potential), value (which looks for undervalued stocks), or blend (a mix). Bond fund managers also divide their holdings into three general categories: short-term bonds that mature within one year; intermediate-term bonds that mature between one and five years; and long-term bonds that mature after five years.