A purchaser of a bond is lending money to the issuer, and will usually collect some regular interest payments until the money is returned. Balanced Funds Balanced funds mix some stocks and some bonds. 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. Stocks represent part ownership, or equity, in corporations, and the goal of stock ownership is to see the value of the companies increase over time. Analyzing Stocks .
Global funds invest in both U.S. and international-based companies.
In general, international and global funds are more volatile than domestic funds. Sector funds can be extremely volatile, since the broad market will find certain sectors very attractive and very unattractive - often in rapid succession. Stock index funds seek to match the returns of a specified stock benchmark or index. Index funds do not even attempt to beat the equities market, they simply seek to come as close as possible to equaling it. The key to the unquestioned superiority of index funds is their extremely low expenses - they charge very low fees for providing the market's returns.