Diversified Fund

AAA

DEFINITION of 'Diversified Fund'

An investment fund that contains a wide array of securities to reduce the amount of risk in the fund. Actively maintaining diversification prevents events that affect one sector from affecting an entire portfolio, make large losses less likely.

INVESTOPEDIA EXPLAINS 'Diversified Fund'

A diversified fund contrasts with specialized or focused funds, such as sector funds, which focus on stocks in specific sectors such as biotechnology, pharmaceuticals or utilities, or in particular regions such as Asia or Europe.

RELATED TERMS
  1. Unsystematic Risk

    Company or industry specific risk that is inherent in each investment. ...
  2. Systematic Risk

    The risk inherent to the entire market or entire market segment. ...
  3. Mutual Fund

    An investment vehicle that is made up of a pool of funds collected ...
  4. Diversification

    A risk management technique that mixes a wide variety of investments ...
  5. Sector Fund

    A stock mutual, exchange-traded or closed-end fund that invests ...
  6. Fund Manager

    The person(s) resposible for implementing a fund's investing ...
Related Articles
  1. The Importance Of Diversification
    Bonds & Fixed Income

    The Importance Of Diversification

  2. Top 4 Signs Of Over-Diversification
    Brokers

    Top 4 Signs Of Over-Diversification

  3. The Dangers Of Over-Diversifying Your ...
    Insurance

    The Dangers Of Over-Diversifying Your ...

  4. Mutual Fund Basics Tutorial
    Mutual Funds & ETFs

    Mutual Fund Basics Tutorial

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center