Types of Mutual Funds
U.S. Fixed-Income - These funds invest in all types of U.S. bonds, including government and corporate bonds. They will typically invest in higher-quality investments with little risk of default across a broad range of maturities.
High Yield - These funds typically invest in low-quality debt and are subject to a high risk of default. Consequently, they tend to offer a higher yield. They also tend to trade and are priced more like common stocks.
Government - These mutual funds invest in debt from the U.S. government. Conservative by nature, they generally invest in all types of government bonds, including those backed by the government but not directly issued by the government.
International Fixed-Income - These funds invest in bonds of foreign governments and are usually riskier than U.S. investments since they are impacted by fluctuations in the foreign currency markets.
Global-Bond Funds - These funds invest in foreign and U.S. bonds. Historically, global bond funds have outperformed domestic bond funds, but at the expense of the additional risk of foreign currency fluctuation.
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