Reshaping the American financial system - Mutual Funds, part 1

New England Economic Review, July-August, 1997 by Peter Fortune

Types of Mutual Funds

The Investment Company Institute identifies 22 groups of open-end
mutual funds, according to the objectives outlined in the
prospectus. This box describes those groups and shows how they have
been aggregated for this study into four groups: equity, bond and
equity, bond, and money market. The ICI data exclude closed-end
funds, unit investment trusts, variable annuities, and unregistered
funds (such as hedge funds).

Equity Funds            Investing primarily in common stocks with
                        the goal of long-term growth

Aggressive Growth       Maximum appreciation with no concern for
                        current income
Growth                  Capital appreciation with some concern for
                        current income
Growth and Income       Capital appreciation and steady current
                        income

Equity-International    Capital appreciation for non-U.S. common
                        stocks

Equity-Global           Capital appreciation from both U.S. and
                        non-U.S. stocks

Bond and Equity Funds   Investing in a mix of common stocks and
                        long-term debt with the goal of achieving
                        both long-term growth and income

Equity-Income           High income from common stocks with history
                        of continuous dividends

Flexible Portfolio      Stocks, bonds, and liquid assets varying
                        with market conditions

Balanced                Capital appreciation, current income, and
                        stability of principal

Income-Mixed            High current income from both stocks and
                        bonds

Bond Funds              Investing in long-term bonds with the
                        primary goal of income

National Municipal      Municipal bonds issued by any or all states

State Municipal         Municipal bonds issued by specific states

Income-Bond             Mixture of corporate and government bonds

Government              U.S. Treasury securities

GNMA                    Mortgage securities backed by Government
                        National Mortgage Association

Global Bond             Bonds of both U.S. and non-U.S. issuers

Corporate Bond          Diversified portfolio of corporate bonds

High Yield Bond         Maintain at least 2/3 of assets in
                        non-investment-grade corporate bonds

Money Market Funds      Investing in short-term, highly liquid
                        securities

Tax-Exempt, National    Short-term obligations of state and local
                        governments

Tax-Exempt, State       Short-term obligations of state and local
                        governments within specific states

Taxable                 Short-term obligations of U.S. government
                        and corporations

Note: Precious metals funds are recorded by the ICI but are excluded
from this study. Option/Income funds were recorded separately by the
ICI but were folded into income-equity funds (in our bond and equity
group) after December 1991.