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A stock fund or equity fund is a fund that invests in stocksalso called equity securities. Fund assets are typically mainly in stock, with some exchange traded funds definition deutsch of cashwhich is generally quite small, as opposed to bondsnotes, or other securities. This may be a mutual fund or exchange-traded fund.
The objective of an equity fund is long-term growth through capital gains, although historically dividends have also been an important source of total return. Exchange traded funds definition deutsch equity funds may focus on a certain sector of the market or may be geared toward a certain level of risk.
Stock funds can be distinguished by several properties. Funds may have a specific style, for example, value or growth. Funds may invest in solely the securities from one country, or from many countries. Funds may focus on some size of company, that is, small-caplarge-capet cetera.
Funds which involve some component of stock picking are said to be actively managedwhereas index funds try as well as possible to mirror specific stock market indices. An index fund buys and sells securities in exchange traded funds definition deutsch manner that mirrors the composition of the selected index. The fund's performance tracks exchange traded funds definition deutsch underlying index's performance.
Turnover of securities in an index fund's portfolio is minimal. As a result, an index fund generally has lower management costs than other types of funds. A growth fund invests in the stock of companies that are growing rapidly. Growth companies tend to reinvest all or most of exchange traded funds definition deutsch profits for research and development rather than pay dividends. Exchange traded funds definition deutsch funds are focused on generating capital gains rather than income.
This is a fund that invests in "value" stocks. Companies rated as value stocks usually are older, established businesses that pay dividends. A fund that invests in one area of industry is called a sector fund. These funds offer high appreciation potential, but may also pose higher risks to the investor. Examples include gold funds gold mining stocktechnology funds, and utility funds. An equity income fund stresses current income over growth.
The funds objective may be accomplished by investing exchange traded funds definition deutsch the stocks of companies with long histories of dividend payments, such as utility stocks, blue-chip stocks, and preferred stocks.
Option income funds invest in securities on which options may be written and earn premium income from writing options. They may also earn capital gains exchange traded funds definition deutsch trading options at a profit. These funds seek to increase total return by adding income generated by the options to appreciation exchange traded funds definition deutsch the securities held in the portfolio.
Balanced Funds invest in stocks for appreciation and bonds for income. The goal is to provide a regular income payment to the fund holder, while increasing its principal A fund that owns stocks and a substantial amount of assets other than stocks is considered an asset allocation fund. A fund that switches between asset classes based on predictions of future returns is called a tactical allocation fund.
Other funds may maintain a more or less constant proportion of assets, due to the belief that such prediction is not reliable. The other funds may be stock funds, in which case the original fund can be called "fund of stock funds". See exchange traded funds definition deutsch of funds. Hedge funds often trade stocks, but may trade or invest in anything else depending on the fund.
This is done to reduce the risk of investments in stocks. From Wikipedia, the free encyclopedia. This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. September Learn how and when to remove this template message. Primary market Secondary market Third market Fourth market. Common stock Golden share Preferred stock Restricted stock Tracking stock. Authorised capital Issued shares Shares outstanding Treasury stock.
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Long-only fund Stable value fund. Mutual fund Open-end fund Exchange-traded fund Closed-end fund Real estate investment trust. Hedge fund Private equity fund Pooled income fund Endowment fund Pension fund Sovereign wealth fund Sovereign investment fund.
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Traditional Long-only fund Stable value fund.