Types of funds

Types of funds

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By Anthony Rovello

Mutual funds

Take cash from a large group of investors and invest in stocks, bonds and other securities. Shares of mutual funds are bought and sold at the end of each trading day.

Money-market funds

Are fixed-income mutual funds that invest in low-risk, short-term debt and can be easily turned into cash.

Index funds

Are a type of mutual fund whose investments track a particular market index, such as the S&P 500.

Exchange-traded funds, or ETFs,

Are funds similar to mutual and index funds, except they can be traded like stocks throughout the day over a stock market exchange.

Real estate investment trusts

Are companies that invest in real estate, income-producing properties like apartment buildings, hotels or malls. They are often compared to mutual funds because they typically hold a selection of real estate investments.

Hedge funds

Pool funds from pre-qualified investors, typically high-net-worth individuals and organizations. They typically employ riskier trading strategies and charge high performance-based fees.

Multiple Choice

Mutual funds

• Take cash from a large group of investors and invest in stocks, bonds and other securities. Shares of mutual funds are bought and sold at the end of each trading day.

• Pool funds from pre-qualified investors, typically high-net-worth individuals and organizations. They typically employ riskier trading strategies and charge high performance-based fees.

• Are funds similar to mutual and index funds, except they can be traded like stocks throughout the day over a stock market exchange.

• Are fixed-income mutual funds that invest in low-risk, short-term debt and can be easily turned into cash.

Multiple Choice

Money-market funds

• Take cash from a large group of investors and invest in stocks, bonds and other securities. Shares of mutual funds are bought and sold at the end of each trading day.

• Pool funds from pre-qualified investors, typically high-net-worth individuals and organizations. They typically employ riskier trading strategies and charge high performance-based fees.

• Are funds similar to mutual and index funds, except they can be traded like stocks throughout the day over a stock market exchange.

• Are fixed-income mutual funds that invest in low-risk, short-term debt and can be easily turned into cash.

Multiple Choice

Index funds

• Are a type of mutual fund whose investments track a particular market index, such as the S&P 500.

• Pool funds from pre-qualified investors, typically high-net-worth individuals and organizations. They typically employ riskier trading strategies and charge high performance-based fees.

• Are funds similar to mutual and index funds, except they can be traded like stocks throughout the day over a stock market exchange.

• Are fixed-income mutual funds that invest in low-risk, short-term debt and can be easily turned into cash.

Multiple Choice

Exchange-traded funds, or ETFs,

• Take cash from a large group of investors and invest in stocks, bonds and other securities. Shares of mutual funds are bought and sold at the end of each trading day.

• Pool funds from pre-qualified investors, typically high-net-worth individuals and organizations. They typically employ riskier trading strategies and charge high performance-based fees.

• Are funds similar to mutual and index funds, except they can be traded like stocks throughout the day over a stock market exchange.

• Are fixed-income mutual funds that invest in low-risk, short-term debt and can be easily turned into cash.

Multiple Choice

Real estate investment trusts

• Are companies that invest in real estate, income-producing properties like apartment buildings, hotels or malls. They are often compared to mutual funds because they typically hold a selection of real estate investments.

• Pool funds from pre-qualified investors, typically high-net-worth individuals and organizations. They typically employ riskier trading strategies and charge high performance-based fees.

• Are funds similar to mutual and index funds, except they can be traded like stocks throughout the day over a stock market exchange.

• Are fixed-income mutual funds that invest in low-risk, short-term debt and can be easily turned into cash.

Multiple Choice

Hedge funds

• Are companies that invest in real estate, income-producing properties like apartment buildings, hotels or malls. They are often compared to mutual funds because they typically hold a selection of real estate investments.

• Pool funds from pre-qualified investors, typically high-net-worth individuals and organizations. They typically employ riskier trading strategies and charge high performance-based fees.

• Are funds similar to mutual and index funds, except they can be traded like stocks throughout the day over a stock market exchange.

• Are fixed-income mutual funds that invest in low-risk, short-term debt and can be easily turned into cash.