Equity funds account for more than half of the assets held by mutual funds.  There are a few different factors than can be taken into account when describing these funds:

• The fund’s purpose and risk level.
• The size of the companies whose stock is held by the fund.
• The geographical location of the companies in the fund.

In addition, there are two special types of equity funds that are not described by those factors:

• Index Funds.
• Sector Funds.

Mutual Funds by Purpose and Risk Level

• Aggressive Growth Funds

These funds generally invest in companies that are growing very fast – more than 20% annually.  Stocks in these companies trade at relatively high prices.  For these reasons, these funds carry a high risk.

• Growth Funds

Growth funds concentrated on companies that are growing at a slower – less than 20% – rate, but continuous rate.  These companies are generally established, leading corporations whose consistent growth can be expected.  These funds are less risky than the aggressive funds.

• Income Funds

Income funds focus on earning income through dividends, and therefore invest in companies that have a regular history of paying dividends.

• Growth & Income Funds

These funds invest in both stocks that pay dividends and in those representing growing companies.

Mutual Funds by Size of Held Companies

• Small Cap Funds

These funds invest most of their assets in companies with a small market cap, generally up to 5 billion dollars.

• Mid Cap Funds

These are funds whose assets are invested in companies a medium market cap – between 5 and 20 billion dollars.

• Large Cap Funds

Large cap funds invest in companies with market caps beyond 20 billion dollars.

Mutual Funds by Geographical Location of Held Companies

• Funds that invest only in American corporations are Domestic Funds.
• International Funds focus on companies outside America.
• Global Funds are ones that invest in both American and foreign corporations.