Mutual funds are organized into various categories, based on the objectives of the fund and also the types and amounts of stocks and bonds that are held in the portfolio.

Global or International Funds invest in companies and industries all over the world. Global funds even include United States investments. These types of funds are influenced by different risks, such as changes in exchange rates, different government regulations, varying economic and leadership conditions, and less regulated accounting standards. Rewards are also different, as these companies can succeed even when U.S. companies are struggling. It is truly an international market these days, and these funds offer a way to balance risk within your investment strategy.

Growth Funds concentrate on company stocks that are expected to increase in value with little consideration given to current dividend or income. Aggressive growth funds take more risk in seeking the greatest long-term growth.

Income Funds emphasize current income over growth. These are safer investments designed to provide a return now, without focusing on the long-term. Therefore, risk is less but reward is also less. If you're close to retirement, or just want to invest in something with less risk (and less reward), these type of funds are a good choice. .

Index Funds are passively managed mutual funds that try to mirror the performance of a specific index, such as the S&P 500. Since portfolio decisions are automatic and transactions are infrequent, expenses tend to be lower than those of actively managed funds. By buying stocks in a large number of companies, these funds seek to offset risk associated with a smaller number of investments. However, this also means less reward.

Large Cap Funds primarily invest in stocks of large corporations such as those found in the S&P 500. These types of funds focus on companies with a market capitalization, hence the "Cap" in the name, greater than $5 billion. Companies this large are very stable investments providing less risk and also less reward.

Money Market Funds invest in securities that mature in a relatively short period of time at a modest interest rate. The goal is stability, although this is not insured or guaranteed.

Sector Funds specialize in stocks of a particular industry. For example, an automotive sector fund would only invest in automotive-related companies. Sectors typically go up (increase) and down (decrease) in cycles, based on varying economic conditions.

Small Cap Funds primarily invest in small, start-up or very specialized companies. Small cap(italization) funds typically invest in companies with a market capitalization greater than $300 million but less than $1 billion. Small cap funds have a greater level of risk and a greater potential for higher return.

Specialty Funds exist for nearly every special interest, such as precious metals mining funds, socially conscious funds, etc.

Tax-Free Funds invest in municipal securities whose interest payments are free from federal income taxation, although they may be subject to state taxes.