There are many types of mutual funds, each with its own stated goals and objectives, which are outlined in their prospectuses. One mutual fund may focus on delivering long-term growth of income, and one may focus on long-term growth of capital. All mutual fund investing involves some level of risk, and there are mutual funds created for every level of risk. Keep in mind that mutual funds are not guaranteed or insured by any bank or government agency; you can lose money. Understanding what you want to achieve with your investment and talking with a financial professional will help determine what types of funds to invest in to meet your goals. Here are the basic mutual fund types or investment asset classes.
The investment objective and characteristics give an overview of what to expect with each type of fund.