Buried and Confusing Costs. Mutual funds specialize in burying their costs. Fund Classifications Mutual funds come in every possible size, shape, and color. Here are some of the general categories of mutual funds. Bond Funds Bond mutual funds are pooled amounts of money invested in bonds.
Bonds are IOUs, or debt, issued by companies or governments.
A purchaser of a bond is lending money to the issuer, and will usually collect some regular interest payments until the money is returned. Additionally, mutual funds are often categorized by the type of stock that is bought. It is important to know the distribution of stocks to bonds in a specific balanced fund to understand the risks and rewards inherent in that fund. In general, international funds are much more volatile than domestic funds. International funds generally invest only in foreign companies, while global funds may invest in some U.S.-based companies in addition to foreign companies.