What Kinds of Mutual Funds Are There?

In their work the mutual funds utilize financial instruments and investment vehicles of varying degrees of risk. For that reason, they are suitable for investors seeking security and also the opportunity to gain larger returns. Mutual funds can be classified by their degree of risk:

• low risk funds - money market funds, fixed-return securities funds,
• balanced funds - the investment proportion between fixed-return securities and shares stays close to a 50/50 ratio.
• high risk funds - investing only in shares and real estate .

The diagram is presented only as an illustration. The actual proportions of the risk and reward potential between various types of investment fund may be different.