Advice for Mutual funds

Advice for Mutual funds - Large-Cap Funds...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Large-Cap Funds Large-capitalization funds generally invest in companies with market values of greater than $8 billion. Some, like the Vanguard 500 Index fund, merely mimic the index and invest in all 500 companies. Others, like Fidelity's huge Magellan fund, try to beat the index by picking a mix of large caps that will outperform the broader market. As you can see from the applet at the right, large-cap funds are less volatile than funds that invest in smaller companies. Usually, that means you can expect smaller returns, but lately, large caps have outperformed all others. The last few years of the 1990s dished up an odd combination of economic stability in the U.S., but turmoil in Asia, Latin America and Russia. That made the stock market extremely volatile and convinced many investors to run for the relative stability of large, established companies like General Electric and Microsoft. That may not always be the case, but for most investors, a large-cap fund is their core long-term holding, anyway. A good one is a reliable -- but far from stodgy -- place to park your retirement savings. Mid-Cap Funds As the name implies, these funds fall in the middle. They aim to invest in companies with market values in the $1 billion to $8 billion range -- not large caps, but not quite small caps, either. The stocks in the lower end of their range are likely to exhibit the growth characteristics of smaller companies and therefore add some volatility to these funds. They make the most sense as a way to diversify your holdings. Small-Cap Funds A small-cap fund, like Turner Small Cap Equity, will focus on companies with a market value below $1 billion. The volatility of the fund often depends on the aggressiveness of the manager. Aggressive small-cap managers will buy hot growth and technology companies, taking high risks
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/30/2008 for the course NOT 001 taught by Professor Notaprofessor during the Spring '08 term at N. Arizona.

Page1 / 4

Advice for Mutual funds - Large-Cap Funds...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online