It is imperative to comprehend the fact that every mutual fund as its own separate paths of rewards and risks. The more you expect in return, the more risk there is involved in the fund-it is the same with almost everything in life. All types of mutual funds have risks involved with them even though some might have a lower level of risk than others. You can never get rid of all the risks-a tried and true statement of investment.
Money market is one of the types of mutual funds that are less risky than most of the other funds out there. You would not get anything huge as a return investment but then you can sleep at night knowing that your principal is safe.
Balanced funds are meant to give an overall mix of income, capital appreciation and safety. The main strategy here is to invest in combinations of equities and fixed income funds; the usual weighting being 40% fixed income and 60% equity. However, the weighting can have restrictions to a specific minimum or maximums for class asset.
Equity funds are funds that represent the biggest category of funds. The main objective here is to gain capital growth in the long run, along with an income of sorts. Global funds or international funds can be invested anywhere in the world. International funds are more volatile than others and entail unique political and country risks thus it becomes difficult to classify them as safer or riskier than local or domestic investments.
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