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Series 6 A
Mutual Fund - Type Fund
Question | Answer |
---|---|
Money Market - Portfolio | Fixed Income Cash equivalent, Such as T-bills,CD's commercial paper,BAs |
Money Market - Objectives/Risk/Features | Fixed Income Preservation of capital, Attempts to maintain $1 NAV(not guaranteed) Used to "park" fund while making investment decisions |
US Government - Portfolio | Fixed Income T-bonds, T-notes, T-bills |
US Government - Objectives/Risk/Features | Fixed Income Income with no risk May be subject to interest rate the longer the average maturity of the portfolio, the greater the interest rate risk. The funds themselves are NOT guaranteed by the US. |
Municipal Bond - Portfolio | Fixed Income Municipal Bonds (some funds have of only a single state) |
Corporate: Investment Grade - Portfolio | Fixed Income Corporate Bonds rated BBB/Baa or higher |
Corporate: Investment Grade - Objectives/Risk/Features | Fixed Income Income with modest credit risk Dividends are fully taxable Interest rate risk |
Corporate: High Yield ("Junk Bonds") - Portfolio | Fixed Income Corporate Bonds rated BB/Ba or lower |
Corporate: High Yield ("Junk Bonds") - Objectives/Risk/Features | High Than normal income with higher than normal default risk. Investor must be able and willing to assume default risk. Also has interest rate risk. |
Growth & Income - Portfolio | Blend Mix of equities and bonds |
Growth & Income - Objectives/Risk/Features | Income with opportunity for growth Less growth than pure growth fund, less income than pure income fund Some managers allowed wide discretion regarding mix of portfolio securities. |
Balanced - Portfolio | Blended Mix of equities and bonds |
Balanced - Objectives/Risk/Features | Growth with opportunity for income. Portfolio mix usually under tighter constraints than growth & income fund |
Equity Income - Portfolio | Equity Dividend paying equity |
Equity Income - Objectives/Risk/Features | Equity Safe, consistent income with secondary objective of growth. Less volatile than other equity funds. |
Growth - Portfolio | Equity Common stock |
Growth - Objectives/Risk/Features | Capital appreciation Income not a consideration subject to market fluctuation |
Aggressive Growth - Portfolio | Equity Small Cap stocks |
Aggressive Growth - Objectives/Risk/Features | Maximum capital appreciation May employ short-term trading strategies. Very volatile. Investors must be risk tolerant. |
Index - Portfolio | Equity Common stocks in same proportions as selected index (E.g) S&P 500) |
Index - Objectives/Risk/Features | Match the return of the market Passively managed Low expenses and portfolio turnover Tax efficient |
Foreign - Portfolio | International Common stocks from outside the US |
Foreign - Objectives/Risk/Features | International Capital appreciation in markets that might not follow US market. Exposure to exchange rate risk and political risk, in addition to market risk. |
Global - Portfolio | US and foreign Common stock |
Global - Objectives/Risk/Features | Capital appreciate in whatever markets look attractive to manager. Exposure to exchange rate risk and political risk, in addition to market risk. |
Special Types - Sector - portfolio | Common stocks from particular industry (e.g, telecommunication) |
Special Types - Sector Objectives/Risk/Features | Provides exposure to selected industry group without the hassle of individual stock selection by the investor Less diversification increases risk if sector suffers downturn. |