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. Pooled Funds

    Funds from many individual investors that are aggregated for ...
  2. Large Cap - Big Cap

    A term used by the investment community to refer to companies ...
  3. Style Box

    Created by Morningstar, a style box is designed to visually represent ...
  4. Asset Allocation

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

    A formal legal document, which is required by and filed with ...
  6. Benchmark

    A standard against which the performance of a security, mutual ...
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