At the same time, they seek to minimize fluctuations in the overall account value through a diversified investment strategy. There are several different types of asset allocation funds. For instance, an asset allocation fund may invest in commercial funds, technological funds, scientific funds, or any combination of similar types. These funds offer a combination of capital appreciation that is, the increase in value that results when a security s price increases and current income. Investments are primarily in stocks, which combine the potential for capital growth with a record for paying out dividends.
Bonds form part of the growth and income to enhance current income.
The aim is to increase the value of the capital invested as well as to provide periodic dividend income, which will be automatically reinvested to buy more shares in the funds. There are many different types of growth and income funds. These funds try to maximize capital appreciation. Investments are primarily in stocks which are shares of ownership, also known as equities bought for the potential increase in value, with less reliance on a return through dividends. Types of Stoc k Blue chip stock stock in well-regarded and financially strong companies.