A way of differentiating mutual funds according to their investment objectives and principal investment features. This categorization allows investors to spread their money around in a mix of funds with a variety of risk and return characteristics

With stock funds, the basic categories are defined by the size of the companies in which the fund invests - large-cap, mid-cap and small-cap - and investment style - value, growth and blend (value/growth mix). Specialty Fund Stock Fund (Real Estate Fund, Health Fund, etc.) and the International Fund offer additional opportunities.

Bond funds are categorized principally by their average portfolio maturities - long, intermediate and short - and credit quality - high, medium and low. Municipal and international funds provide additional bond investment diversification.

Hybrid Fund, or an Asset Allocation Fund offer a mix of stock and bond investments and come in two types: conservative and moderate allocation.