Mutual funds are companies that collect money from number of investors and invest the money in different investment opportunities so they can earn a good profit. There are different types of mutual funds are available in the investment market. An investor who wants to invest his money in mutual funds must have the knowledge about different kinds of mutual funds.

Here I describe certain types of mutual funds so you can decide the better one for your money.

Growth funds are the type of funds where the collected money is invested in different stocks in order to capital appreciation over a long term. Value of these mutual funds increase with the upward in stock market and decrease with a downfall in the stock market.

Growth and income funds are another type of mutual funds where mutual fund company invest the available funds in the investment opportunities which can grow in the short time periods and can provide better profit on the invested money. These companies basically invest the collected money in common stocks of the companies that have a solid growth rates, as well as a history of consistent dividend payout.

Bond fund is another type of mutual fund also known as income funds. Under this category mutual fund companies invest the available money in the opportunities that can provide a regular profits on the invested money. They are not much concerned with the growth of assets.

Balanced fund is a type of mutual fund, which invest the available money in variety of opportunities such as in common stocks, preferred stocks, bonds etc. the main objective is to earn a high rate of return on the invested money. Money market fund is another type of mutual fund where investments are made in most liquid securities to meet the short-term needs of investors.

A mutual fund where the investments are made in the single industry or in related group of industries is called a specialized fund or sector fund.