Series 24: Diversification Of Funds

Diversification of Funds

Management companies can be either diversified or non-diversified. Because most investors purchase funds to achieve diversification, judging whether a fund is properly diversified or not is important. Funds can be diversified in several ways:

• • They can diversify across asset classes (stocks versus bonds) or across industries (tech versus durable goods).
• • They can also diversify by holding the securities of many different issuers.

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