Even if they do earn a profit, these companies seldom pay dividends . Instead, they reinvest any profits into further growth of their core business. Also included in this category are funds that invest in aggressive growth stocks . Shares of growth funds rise as the share prices of stocks held in the portfolio grow, triggering regular capital gains . Mutual funds that invest in the stocks of companies that pay dividends on a regular basis.
Income funds tend to have less volatility of returns than growth funds.
Mutual funds that invest in the stocks of companies that fund managers think are cheaper than their intrinsic value. Warren Buffett is a notorious value investor. There also mutual funds that invest in a particular country or region of the world. Global funds include investments in U.S. stocks, while international funds invest entirely in foreign stocks. Since stock markets often have a negative correlation , diversification is a benefit of investing in global or international funds.