Flexible Fund


DEFINITION of 'Flexible Fund'

A mutual fund or other pooled investment that may change its investment strategy as it sees fit, as opposed to sticking to one particular investment vehicle, company size, or asset allocation. If a fund is flexible in its strategy, this will usually be stated in the prospectus and/or other marketing material.

BREAKING DOWN 'Flexible Fund'

Peter Lynch ran a flexible fund when he managed the Fidelity Magellan fund in the 1980s and early 1990s. Today, most mutual funds are pegged to a particular "style box", such as large-cap growth or small-cap value, which helps them to reach out to a specific audience of investors.

A flexible fund will often state that its main objective is maximizing total return, and will choose the best investments to meet that goal. Many investors, however, appreciate knowing a mutual fund's focus because it helps them to diversify investments across several funds. Because of this, many flexible funds operating today are run by experienced, respected money managers who can often market the fund on their names alone.

  1. Large Cap - Big Cap

    A term used by the investment community to refer to companies ...
  2. Pooled Funds

    Funds from many individual investors that are aggregated for ...
  3. Prospectus

    A formal legal document, which is required by and filed with ...
  4. Asset Allocation

    An investment strategy that aims to balance risk and reward by ...
  5. Style Box

    Created by Morningstar, a style box is designed to visually represent ...
  6. Equity Risk Premium

    The excess return that investing in the stock market provides ...
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