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 ?
The study tests monthly returns of diversified mutual funds from Jan 1962 to Dec 1993.
I'm sticking with dull, diversified mutual funds because I know I can't.
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.
Diversified mutual funds or investment trusts do not constitute a competing financial interest.
Still, you'll have to expect more volatility from your portfolio than if you owned broadly diversified mutual funds.
He doesn't usually recommend specialized technology funds since many diversified mutual funds have some tech holdings.
The safest way to invest in any emerging market is through diversified mutual funds. We especially like the following no-load funds for long-term participation in the Asian markets: Fidelity Southeast Asia (1-800-544-8888), T.

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