healthcare, or energy. These funds aim to take advantage of the growth potential of a particular sector. Sector funds carry higher risk as they are concentrated in a specific area, and investors should understand the sector before investing. Example: Vanguard Health Care Fund, Fidelity Select Tec...
ll probably recognize, like Apple or Microsoft—that are valued over $10 billion. They’re more predictable and the calmest type of funds available. Although their returns aren’t always as high as other funds, they’re what many consider to be a low-risk, stable foundation for your ...
Low-risk, high-return mutual funds.Lists mutual funds delivering superior risk-adjusted performances in five major categories over the five-year period that ended in October, 1993. Categories; Annual return; Initial sales charge; Minimum initial investment; Fidelity Contrafund; Invesco Industrial ...
If you are looking for short-term stable returns, go for money market funds that invest in short-term debt instruments like certificate of deposits or Government Bonds. If you have a low-risk appetite, this type of mutual fund category is a great choice. They are comparatively safer investmen...
Professional management: you don’t have to research individual stocks yourselfYou can’t select or change the stocks or other assets in each fund Diversification: the risk may be lower because your money is spread across multiple stocks or other assetsYou might get a lower return than if you...
There are many, many mutual funds. Just because amutual fundis popular doesn’t mean it’s the right fund for you. It may be helpful to ask yourself some questions: Do you want your money to grow steadily over time with a low level of risk? Do you want the highest potential returns...
Active risk: While active managers are usually trying to choose investments to earn high returns, there is a risk that they will choose poorly, which can hurt the fund’s performance. Underperformance: On average, actively managed funds have historically performed worse than their benchmarks over...
Nonetheless, the degree of risk associated with mutual funds is far less than most other riskier investment vehicles. Mutual Fund Expense Ratio For most investors, the expense ratio of the mutual fund is a key consideration. The expense ratio states the annual percentage charged by the fund to ...
certificate of deposit (CD). Money market mutual funds are often used as a temporary holding place for cash that will be used for future investments or for an emergency fund. While low risk, they aren't insured by the Federal Deposit Insurance Corporation (FDIC) like savings accounts or CDs...
No investment is risk-free and while mutual funds are generally low-risk because they invest in low-risk securities, they are not completely risk-free. The securities held in a mutual fund may lose value either due to market conditions or to the performance of a specific security, such as ...