Diversified Fund

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Diversified Fund

A fund that has invested in many different types of securities in order to hedge against the securities already in the fund. Ideally, this reduces the risk inherent in any one investment, and increases the possibility of making a profit, or at least avoiding a loss. This may also reduce the expected return on the fund, but it depends on the level and type of diversification. There are two main types of diversification that a fund may utilize. Horizontal diversification involves investing in similar investments. Examples include investing in several technology companies or in different types of bonds. Vertical diversification involves investing in very different securities; for example, one may choose to invest in securities traded in different countries, or in both winter clothing and swimsuit companies. Both types of diversification may be as broad or as narrow as the fund's manager chooses. In general, broader diversification equates to less risk and less return.
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References in periodicals archive ?
Closed-end, diversified investment companies Flaherty & Crumrine Preferred Income Fund Incorporated (PFD) (NYSE:PFD) and Flaherty & Crumrine Preferred Income Opportunity Fund Incorporated (PFO) (NYSE:PFO) reported on Monday that their boards of directors have approved a new regular monthly dividend and a special year-end dividend to be paid in December.
Closed-end, diversified investment companies Flaherty & Crumrine/Claymore Preferred Securities Income Fund Incorporated (FFC) (NYSE:FFC) and Flaherty & Crumrine/Claymore Total Return Fund Incorporated's (FLC) (NYSE:FLC) boards of directors on Monday declared new 4% and 2.3% higher regular dividends of USD0.13 and USD0.135 per share respectively over November 2010 as well as a special year-end dividend of USD0.135 per share, to be paid by both.
Independent investment adviser Flaherty & Crumrine Incorporated reported on Tuesday that the boards of directors of Flaherty & Crumrine Preferred Income Fund Incorporated (NYSE:PFD) and Flaherty & Crumrine Preferred Income Opportunity Fund Incorporated (NYSE:PFO), both closed-end, diversified investment companies, have approved new dividend amounts on their common stock.

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