These funds seek equities with a higher share value that also maintain a solid record of paying dividends. Balanced Funds invest in both stocks and bonds. They emphasize the growth potential of stocks as well as the relative stability of income from bonds. Income Funds seek a high level of current income, is often achieved by investing in common stocks of companies with good dividend-paying records. They may invest in such fixed-income securities as corporate and government bonds.
Some income funds maintain more aggressive objectives than others do.
High Yield Funds seek a very high yield, but carry a greater degree of risk than corporate bond funds. In turn, high-yield corporate bonds have the potential to produce greater income than government bonds. The majority of their portfolios are invested in lower-rated corporate bonds. Investors should carefully assess the risk associated with an investment in this type of fund. Money Market Funds participate in short-term investment instruments that are considered the safest, most stable types of securities available.