Mutual Fund Types

Money market funds
They are considered the safest mutual fund investments because till date these funds have maintained a 100 % success rate as none has ever folded up. Therefore serious investment objectives like storing money for emergencies, saving for the short term, or looking for a place to store cash from sale of an investment, are perfectly compatible with money market funds. These funds also invest in short term debt instruments occasionally and return accruals that are double of what bank securities offer.

Additionally money markets allow investors to write checks out of their accounts and usually allow a high level of liquidity that is not found in bank securities. Although FDIC does not insure these funds, none has ever folded up contrary to many banks that have failed.

Bond funds

Investments in bond funds have more risk than those of the money market funds and are usually aimed at consolidating a portfolio by generating more income. Some of the main bond funds are:

• Municipal bond funds
• Corporate bond funds
• Mortgage backed securities funds
• US government bond funds

Stock funds

Stock funds promise more ‘bang for the buck' but are fraught with the risk of investments being exposed to the turbulence that stock markets occasionally experience. Where money market funds and bond funds give an ROI that is barely above inflation, stock funds are way ahead with their high earning potential. Some of the main stock funds are:

Strategic

• Growth funds
• Value funds
• Blend funds

Size wise

• Large cap funds
• Mid cap funds
• Small cap funds
• Micro cap funds

International Funds

• Global funds
• Foreign funds
• Country specific funds
• Emerging market funds