Riskier Mutual Fund Products

These flashcards cover key terms and concepts related to riskier mutual fund products discussed in the lecture notes.

Equity Mutual Funds

Invest in common and preferred shares of publicly-traded companies with the goal of earning capital gains and sometimes dividend income.

Balanced Mutual Funds

Invest a percentage of assets in fixed-income securities and a percentage in equities, aiming to earn both current income and capital gains.

Global Mutual Funds

Hold assets from many countries, can include equity or bond funds, often providing diversification benefits.

Specialty Mutual Funds

Focus investments on a specific sector or industry, leading to higher risk due to lack of diversification.

Equity Growth Funds

Aim primarily for capital gains, typically investing in smaller firms with high growth potential and often high volatility.

Equity Index Funds

Replicate movements of a specific market index, generating capital gains and possibly dividend income.

Target-Date Funds

Investment funds with a predetermined maturity date, adjusting asset allocation over time to reduce risk as the target date approaches.

Market Risk

The risk of losses due to fluctuations in market prices, affecting overall fund performance.

Foreign Exchange Risk

Potential losses due to changes in the value of foreign currencies relative to the domestic currency.

Fund Wraps

Investment portfolios comprising multiple mutual funds, reflecting specific asset allocation models, managed by different managers.