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 ...
Related Articles
  1. Mutual Funds & ETFs

    4 Strategies For Managing A Portfolio Of Mutual Funds

    Discover some common strategies to devise a plan and maintain your holdings to reflect it.
  2. Mutual Funds & ETFs

    The Advantages Of Mutual Funds

    Learn how to get diversification, liquidity and professional management at an affordable price.
  3. Mutual Funds & ETFs

    Understanding The Mutual Fund Style Box

    Evaluate your investments with this simple tool.
  4. Investing

    How To Build a Currency Hedged Strategy?

    We are still unsure of how to implement a currency hedge strategy based on the dollar's movement. So let’s focus on what’s easier to measure: time horizon.
  5. Mutual Funds & ETFs

    Top 3 Equity Energy Mutual Funds

    Explore detailed analysis of the top three equity energy mutual funds, and learn about the characteristics and suitability of these funds.
  6. Mutual Funds & ETFs

    Top 5 Corporate Bond Mutual Funds

    Learn about the top five mutual funds that invest in corporate bonds that have investment grade quality and speculative credit ratings.
  7. Mutual Funds & ETFs

    How Interest Rates Affect Mutual Funds

    Find out how changing interest rates impact mutual funds, including bond and money market funds, and how higher rates can discourage investors.
  8. Mutual Funds & ETFs

    Top 4 India Equity Mutual Funds

    Discover four of the top India-focused equity mutual funds, including their objectives, how investments are chosen and how assets are allocated.
  9. Mutual Funds & ETFs

    Top 4 Conservative Allocation Mutual Funds

    Discover the top-rated mutual funds in the conservative allocation category, and learn which investors can utilize them most effectively.
  10. Mutual Funds & ETFs

    5 Secrets You Didn’t Know About Mutual Funds

    Learn five of the "secrets" about mutual funds that can have a significant impact on mutual fund choices and investor profitability.
  1. How often are mutual fund prices updated?

    A mutual fund's price, or its net asset value (NAV), is determined once a day after the markets close at 4 p.m. Eastern time ... Read Full Answer >>
  2. Can minors invest in mutual funds?

    A mutual fund can be opened under the name of a minor through a custodial account overseen by a guardian. The custodian holds ... Read Full Answer >>
  3. Can mutual funds only hold stocks?

    There are some types of mutual funds, called stock funds or equity funds, which hold only stocks. However, there are a number ... Read Full Answer >>
  4. How do mutual funds compound interest?

    The magic of compound interest can be summed up as the concept of interest making interest. On the other hand, simple interest ... Read Full Answer >>
  5. Do mutual funds pay interest?

    Some mutual funds pay interest, though it depends on the types of assets held in the funds' portfolios. Specifically, bond ... Read Full Answer >>
  6. Why have mutual funds become so popular?

    Mutual funds have become an incredibly popular option for a wide variety of investors. This is primarily due to the automatic ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Ex Works (EXW)

    An international trade term requiring the seller to make goods ready for pickup at his or her own place of business. All ...
  2. Letter of Intent - LOI

    A document outlining the terms of an agreement before it is finalized. LOIs are usually not legally binding in their entirety. ...
  3. Purchasing Power

    The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing ...
  4. Real Estate Investment Trust - REIT

    A REIT is a type of security that invests in real estate through property or mortgages and often trades on major exchanges ...
  5. Section 1231 Property

    A tax term relating to depreciable business property that has been held for over a year. Section 1231 property includes buildings, ...
  6. Term Deposit

    A deposit held at a financial institution that has a fixed term, and guarantees return of principal.
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!