Types of Mutual Funds

Equity Funds

While all equity funds invest in stocks, fund portfolios vary based on the fund's investment objectives and the fund manager's style. Depending on your risk tolerance and financial goals, you can select more aggressive or conservative funds to match your needs. For instance, if you have the time to weather the ups and downs of the market, you might select a more aggressive equity fund that's concentrated in the stock of start-up, growth-oriented corporations. Or, if you're interested in receiving regular dividends, you could select a stock fund that invests exclusively in large-cap, blue chip company stocks.

Other funds invest in companies of different sizes, international corporations, or companies in specific sectors of the economy. Additionally, some choose to invest in more than one type of stock with the objective of obtaining stronger returns.

Understanding the forces that drive the performance of mutual funds is a prerequisite to investing wisely in them.

For equity funds, the performance of the stock market is paramount.

The price of stocks, of course, is influenced as much by investors' perceptions as by such quantifiable factors as earnings and dividend growth or the changes in the economy.

Within subsets of the equity universe, factors influencing performance vary widely.

Diversification does not assure a profit, or protect against loss, in a down market.

Investors should consider the investment objectives, risks, charges, and expenses of a mutual fund carefully before investing. A prospectus contains this and other information. A mutual fund prospectus is available through www.scottrade.com or through a Scottrade branch office. The prospectus should be read carefully before investing.

Featured
Online Community

Education meets interaction in the Scottrade Community. Join Scottrade customers from all over the country as you exchange information, ideas and trading strategies in a comfortable online learning environment.

Interact with Scottrade customers and product specialists. Share your thoughts and learn from others. Grow as an investor. Join our community today!

Learn More About the Community >
The information and content provided in the Scottrade® Knowledge Center is for informational and/or educational purposes only. The information presented or discussed is not, and should not be considered, a recommendation or an offer of, or solicitation of an offer by, Scottrade or its affiliates to buy, sell or hold any security or other financial product or an endorsement or affirmation of any specific investment strategy. You are fully responsible for your investment decisions. Your choice to engage in a particular investment or investment strategy should be based solely on your own research and evaluation of the risks involved, your financial circumstances and your investment objectives. Scottrade, Inc. and its affiliates are not offering or providing, and will not offer or provide, any advice, opinion or recommendation of the suitability, value or profitability of any particular investment or investment strategy.