Mutual Funds

How is a mutual fund categorized in terms of risk and return?

A mutual fund’s risk and return profile is determined by its investments:

A fund that invests in high-risk aggressive growth stocks or foreign emerging growth companies is considered to be riskier, with greater return potential, than one that invests in domestic blue chip companies, for example.
Stock mutual funds that invest in growth stocks are considered to have more risk/return potential than funds that invest in stocks that pay dividends.
Balanced funds, which invest in both stocks and bonds, generally have mid-range risk and return.
Bond funds generally have lower risk and return than stock funds; bond funds that invest in shorter term bonds generally have lower risk and return than funds that invest in longer term bonds.