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16 Cards in this Set
- Front
- Back
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Money Market funds - (Cash equivalents, such as T-bills, CDs, commercial paper, bankers acceptance) |
Obj: Preservation of capital Risk: Attempts to maintain $1 NAV (not guaranteed Feat: Used to “park” funds while making investment decisions |
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U.S. Government---fixed income----- ( T-bills T-bonds, T-notes, T-bills ) |
Obj: Income with no credit risk Risk: May be subject to interest rate risk: the longer the average maturity of the portfolio, the greater the interest rate risk Feat: The funds themselves are NOT guaranteed by the U.S |
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Municipal Bond ---- Fixed income-- |
Obj: Income that is free from federal, and possibly state, income tax Feat: The higher the investor’s tax bracket, the more beneficial the tax exemption Risk: May have some default risk Interest rate risk |
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Corporate:Investment Grade-- Corporate bondsrated BBB/Baa orhigher |
- Obj: Income with modest credit risk - Feat: Dividends are fully taxable - Risk: Interest rate risk |
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Corp Investment Grade-- Corp Bonds rated BBB/Baa or higher |
- Obj: Income with modest credit risk - Feat: Dividends are fully taxable - Risk: Interest rate risk |
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High Yield "Junk Bonds" Corp bonds rated BB/Ba or lower |
-Obj: Higher than normal income with higher than normail default risk Investor must be able and will to assume default risk -Risk: Also includes interest rate risk |
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Growth & Income (blended) Fund Mix of equities and bonds |
Obj: Income with opportunity for growth Feat: Less growth than pure growth fund, less income than pure income fund. |
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Balanced |
Obj: Growth with opportunity for income - Portfolio mix usually under tighter constraints than growth and income funds |
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Equity Income Dividend paying equities |
Obj:Safe, consistent income with secondary objective of growt -Less volatile than other equity funds |
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Growth Common Stock |
Obj; Capital appreciation Income not a consideration Risk: Subject to market fluctuation |
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Aggressive Growth Small cap stocks |
Obj: Maximum capital appreciation Feat: May employ short-term trading strategies Risk: Very volatileInvestors must be risk toleran |
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Index Common stocks in same proportions as selected index (E.g., S&P 500) |
Obj: Match the return of the market Feat: Passively managed Low expenses and portfolio turnover Tax efficient Risk: Market Risk |
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International Common stocks from outside of the U.S |
Obj; Capital appreciation in markets that might not follow U.S. market Fisk: Exposure to exchange rate risk and political risk, in addition to market risk |
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Global U.S. and foreign common stocks |
Obj; Capital appreciation in markets that look attractive to manager Risk: Exposure to exchange rate risk and political risk, in addition to market risk |
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Sector Common stocks from particular industry (e.g., telecommunication) |
Obj: Provides exposure to selected industry group without the hassle of individual stock selection by the investor Risk: Less diversification increases risk if sector suffers downturn |
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Special Situations Common stocks of companies undergoing mergers, breakups, bankruptcy, etc |
Obj: Possible large gain if situation plays out as manager predicts Depends on ability of manager to find special deals May be less diversified than other funds Risk: Credit"default" Risk |
