Growth funds seek above-average growth and pay little current income. They invest in companies with strong growth potential or a history of growing earnings. These types of funds invest in companies of all sizes, though some specialize in small, medium, or large-sized companies. These funds invest in companies with strong growth potential, those that pay solid dividends, or in a combination of stocks and bonds. International stock and bond funds seek to profit from strong markets and industries abroad.
Global funds invest in both international and U.S. securities.
Depending on the makeup of the fund's portfolio, these funds have an added element of currency risk and the risk of economic, social, and political problems in certain geographical areas. Bond funds seek to provide current income by investing in corporate, government or municipal bonds. High-yield funds can provide substantial income though they can also decline sharply in value. These funds primarily invest in low-rated corporate bonds, also known as junk bonds. Money market funds are the safest funds for preserving principal and pay income based on current interest rates.