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Types of #Mutual Funds

1 Equity funds

Equity mutual funds invest in the stocks of a diversified group of publicly traded companies. Equity funds have a more significant growth potential but also a greater possibility for value volatility.

2 Growth funds and value funds

Growth funds look for the stocks that fund managers predict will provide a higher rate of return than the market average. Value funds seek businesses whose stock is undervalued by the market.

3 Bond funds

This is the most popular type of fixed-income mutual fund. This is because they pay investors a predetermined rate of return on their initial investment.

4 Money Market Mutual Funds

Money market funds are fixed-income mutual funds that invest in short-term debt from governments, banks, and companies.

5 Balanced Mutual Funds

A balanced fund combines both equities and fixed-income investments such as 60% equities and 40% bonds. The most well-known type of these funds is target-date funds. It automatically rebalances their investments between equities and bonds as you approach retirement.

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