MUTUAL FUNDS

Types of Mutual Funds

There are many different mutual fund types for your personal financial situation. Mutual funds are in several categories, based on their investment objectives.

Equity or Stock Funds

  • Aggressive growth funds: These funds seek long-term growth by investing in stocks of small- to mid-sized companies. Stocks of these companies tend to have greater potential than the overall market trend, but also greater risk.
  • Growth funds: These funds seek long-term growth by investing in stocks of large, well-known corporations. These funds are typically less volatile, but do not offer as much growth potential.

Equity funds can also be classified by U.S. or international stocks.

Combined or Hybrid Funds

  • Growth and income funds: These funds typically invest in stocks and bonds. Stocks are known for their growth potential, bonds for their income-producing capabilities. Growth and income funds don't have as much growth potential as growth funds, but tend to be less volatile in price.
  • Target-date funds: A mutual fund that automatically adjusts the stocks, bonds, cash equivalents mix in its portfolio according to a selected time frame that is appropriate for a particular investor.

Bond or Fixed Income Funds

  • Income funds: Income funds generate a steady stream of income, usually monthly or quarterly, by investing in bonds or other income-producing securities. They tend to provide more income and are typically less risky than funds that invest in stocks or a combination of stocks and bonds.

Money Market or Cash Equivalent Funds

  • Money market funds: Money market funds invest in money market securities such as Treasury bills, certificates of deposit and commercial paper. They historically have been highly liquid, relatively safe investments.

Have Questions About Investing?

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Risk Disclosures

Investing involves risk, including potential for loss.

The stocks of small companies are more volatile than the stocks of larger, more established companies.

Bonds are subject to interest rate risk and may decline in value due to an increase in interest rates.

An investment in the Money Market Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.

LifePath® Funds are target-date portfolios whose investment objectives are adjusted over time to be more conservative as the target date (date the investor plans to start withdrawing their funds) approaches. The principal value of the fund(s) is not guaranteed at any time, including at the target date.

AP2013/11/2028