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.
References in periodicals archive ?
BANKING AND CREDIT NEWS-August 10, 2016-American Growth Fund launches diversified mutual fund focused on cannabis business
If the fund is a diversified mutual fund under the Investment Advisers Act of 1940, it cannot invest more than 5% of its total assets in a single issuer or own more than 10% of the outstanding voting shares of an issuer.
He then went on to say, "A fully diversified mutual fund can offer you dozens and sometimes hundreds of individual stocks or bonds.
"It is advisable to invest in diversified mutual fund schemes which invest in multiple sectors.
If you're tempted by those double-digit yields, the safest way to pursue these bonds is through a diversified mutual fund. Eaton Vance Income Fund of Boston (EVIBX) and Vanguard High-Yield Corporate Bond Fund (VWEHX) have received the highest ratings from Morningstar.
So, even if your investments are modest, spread out to several kinds of stocks--or into a widely diversified mutual fund.
M2 EQUITYBITES-August 10, 2016-American Growth Fund launches diversified mutual fund focused on cannabis business
That's why many analysts and fund managers recommend investing in a basket of companies, in diversified mutual funds, or in ETFs that focus on renewable energy and other green technologies.
And once the interest rates reduce, move to diversified mutual funds. The Indian rupee will start moving up after the parliamentary elections.
For those who prefer not to tie up cash in an annuity, one alternative is to buy tax-efficient, diversified mutual funds such as stock index funds.
The money in her retirement fund--as is true for most retirement funds--was invested in diversified mutual funds. Pat indirectly owned stock in a wide variety of companies.

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