Styles of Mutual Funds

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Today I want to talk about different styles of mutual funds but first, let me ask you a question.

The question is, how do you become a 401k or 403b Superhero to your future self?

That is the question and these videos will give you the answers.

I’m Jonathon Schultheiss and welcome to the Becoming a 401k Superhero videos.

Part of becoming a 401k Superhero to your future self is understanding a little bit about the investment options inside your 401k.

In my last video I talked about the difference between a stock and a bond and today I want to talk about different styles of US investments- that are mutual funds that invest in US companies.

Each US mutual fund falls somewhere on the Morning Star style box.

There are nine different styles and within these styles we usually have Large Cap, Mid Cap and Small Cap mutual funds.

That means you have mutual funds that invest in large companies, mid size companies and small companies.

Then within those categories we have value, blend and growth.

So what makes a company a value over a growth?

Value companies tend to pay out through dividends, growth companies tend to retain the earnings and invest in the bottom line to try to grow.

A blend would be a mutual fund that invests in some growth and some value so it's a blend of the two.

When we look at each of these in the Moring Star style box we also think about risk.

Growth stocks tend to be higher risk and value stocks tends to be lower risk.

Small Cap companies tend to be higher risk and Large Cap companies tend to be lower risk.

So looking at the style box the lower right we go being Small Cap Growth, the more aggressive you are whereas the top left corner being Large Cap Value, tends to be the more conservative of US equity mutual funds.

If you have any questions about your investments and would like my help then click on the link above and lets schedule a time to have a conversation.