Mutual Funds
While stocks and bonds are often preferred investments, some mutual
funds may be used if deemed more beneficial for the client. When using
mutual funds, sector funds are preferred, including both actively
and passively managed sector funds. Sector funds can be beneficial
in terms of controlling a portfolio’s exposure to a specific
sector and providing a high level of diversification within that sector.
The following types of sector funds are most commonly used:
- Actively managed sector funds use a fund manager who selects
specific investments in a given market such as financial services
or healthcare.
- Passively managed sector funds track a specific index such as
the Dow Jones U.S. Consumer GoodsIndex or the Dow Jones U.S.
Utilities Index.
If appropriate, funds that are investment style or market specific
such as a U.S. value-based index fund or a broadly diversified U.S.
equity fund may also be used. |
Download
Print-Friendly Version
