Specialized Mutual Funds
Index funds are designed to produce the same return as the index which they mirror, like the S&P 500, which tracks the performance of 500 large-cap U.S. stocks, or the NASDAQ Composite Index, which tracks technology stocks listed on that exchange.
If you're interested in a single segment of the economy, like biotechnology, natural resources, healthcare or utilities, you can invest in a sector fund.
Investors who want to avoid investing in certain companies because of their ethical or moral beliefs might choose to invest in a socially conscious fund.
As its name suggests, a fund of funds (FOF) invests in other mutual funds instead of individual securities.
A target date fund is a fund of funds with an investment objective aligned with a specific timeframe.
Mutual funds offer an easy way to add international exposure and global diversification to your investment portfolio.