Most mutual funds concentrate their purchases on a certain investment type because they have a particular objective. Keep in mind, though, that the fund classifications are subjective, and the category a particular investment falls into depends on the guidelines the mutual fund manager is following and the judgments he or she makes.

How the fund hopes to profit

• Growth funds usually look for companies that have the potential to increase significantly in value
• Value funds look for companies that are currently not performing up to their potential
• Income funds invest to earn regular dividend and interest payments
• Balanced funds invest in both stocks and bonds to reduce the risk of changing market conditions while providing a strong return

What size companies the fund invests in

• Small companies that may be recent start-ups and offer more potential for growth, but also more risk of losing money
• Large companies are usually older, more stable companies that pose less risk of a major drop in price but offer slower potential growth
• Mid-sized companies have some of the growth potential of small companies but some of the stability of larger companies

Where the fund invests

• International funds make investments around the world, though not in the US, to take advantages of various economic climates
• Emerging market funds invest in developing economies that offer high potential return but also carry significant risk
• Domestic funds invest in companies based in the US
• Global funds invest in both US and international companies
• Sector funds primarily invest in companies within a specific industry, such as energy, healthcare or technology