Make More Money by Investing in Funds with Special Objectives
Funds with Special Objectives, What is Right for You?
There are many ways to invest your money, and funds with special objectives may be something you want to get more involved with. There are so many funds out there, but I wanted to write about a few here like Sector Funds, Precious Metal Funds, Unit Investment Trusts, Green Funds, Tax Free Funds and Index Funds.
Sector Funds have their focus on certain industries like health care, energy and electronics. The funds buy stock in one field so the risk level is greater, but as you know the potential for gain is great as well.
Precious Metal Funds
Precious Metal funds will be seen trading mostly in mining stocks. You will also see some of their assets in gold bullion as well. Usually, they are bought as a hedge against turmoil in the financial markets.
Unit Investment Trusts, or UIT
Unit Investment Trusts put money into corporate bonds with fixed yields (agency bonds like junk bonds, stocks and Ginnie Maes). You will find that the investments are constant for the life of the trust. That sounds great but you must realize that there is no guaranteed return. It is hard for people to asses how well (or not) that they do because their performance isn't tracked by any index.
Tax Free Funds
With Tax Free Funds, you will find they invest in municipal bonds with tax exempt interest. These pay less than agency and corporate bonds. These offer the tax savings to investors, and those that live in high tax states especially appreciate that as you can imagine.
You will see Green Funds also called conscience funds. Like the name suggests, Green Funds are attractive to investors with strong political and social commitments that want to invest in companies that are in line with policies they agree with. You may see a green fund avoiding certain companies while targeting others say with strong environmental records. Some examples of a company they may avoid are tobacco companies.
Index funds need a bit more management than some others. They buy stocks in the companies that are included in particular market averages, or index. Index funds tend to mirror the movements of the markets they track. The fees are low because it takes more management.