Large-Cap Equity Funds – These funds include stock in companies with market values (or capitalization) greater than $10 billion. Because these tend to be large, established corporations, their stocks generally offer lower risk than stocks from mid- and small-cap companies.
Mid-Cap Funds – These funds include stock in companies with market values (or capitalization) between $2 billion and $10 billion. These stocks are typically more volatile than large-cap stocks but less risky than small-cap stocks.
Small-Cap Funds – These funds include stock in companies with market values (or capitalization) under $2 billion. Small companies can often grow much faster than big companies, but their stocks also tend to be riskier because they are generally less established.
International Equity Funds – These funds include stock in companies located outside of the United States. These stocks may trade on either the U.S. or foreign stock exchanges and are generally considered higher-risk investments. Risks include currency fluctuations, political instability, differences in accounting standards and foreign regulations.
Specialty Funds – These funds are mutual funds investing primarily in the securities of a particular industry, sector, type of security or geographic region. Funds that focus on real estate investing are sensitive to economic and business cycles, changing demographic patterns and government actions. Includes real estate, energy, health care and other industry-specific funds.