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These are just a small sample of the many styles of funds available to investors. One of the great sources of fund classification lists is Lipper (a unit of Reuters). Lipper, which provides data and analysis on mutual funds, uses a portfolio-based technique to classify funds in an effective way. Consult Lipper's Web site to get more information on Lipper's fund classifications.

Why so many fund styles and classes? Because people have different preferences on their investment styles. No matter what your taste, there is sure to be a fund (or perhaps a number of funds) that can fit your style. Some example are: Fidelity Magellan (FMAGX), which is a blended fund; T. Rowe Price US Treasury Long-Term fund (PRULX), which is a fixed-income fund; and T. Rowe Price Small-Cap Stock fund (OTCFX), which is a growth fund.

Two More Fund Types

In addition to the general fund types or classes that we covered already, there are two other fund types that are worth noting.

Fund Of Funds - This type of mutual fund takes diversification to an extreme by having other funds in its portfolio. These funds have some advantages such as allowing their investors to be invested in many funds at the same time. Sometimes through these funds investors gain access to funds that have been closed to new accounts. Others may allow investors to gain access to those funds that may have high initial investment requirements. The disadvantages of these funds are over-diversification and possibly higher cost of ownership as the fund itself has to pay the cost of carrying other funds in its portfolio.

Hedge Funds - Unless you are a millionaire looking for a super aggressive (and very high risk) fund, hedge funds are not for you. A …