Types of mutual funds high-risk

Funds investment based on shares , bonds , or both, have a certain degree of risk, which means you can lose your money in any fund depending on what is happening in the market and how to respond funds investment such events. The only funds that have shares are riskier than those that combine stocks and bonds , but even among the fund shares are riskier than some others because of the specific nature of the documents.

Hedge Funds
Funds that invest in specific sectors, such as energy, health and real estate, and those that focus on shares of very small companies are riskier than funds that focus on stocks of large companies and well-known in various industries. In addition, some funds shares globally are riskier than others, especially those dealing with emerging markets or countries in particular. In general, the smaller is the niche and focused, the background will be more risky investment .

Why invest in hedge funds?
Although the average investor can diversify by buying Crossed long term funds (sections and shares and bonds of smaller companies), the most aggressive investors choose the hedge funds to greater risk because there is potential for a reward. During periods of high growth, have a high risk investment can pay quick dividends. The hedge funds offer exposure to areas that otherwise could only be achieved through individual purchases of shares , which may be even more risky.
Funds industry
Sectors such as energy, healthcare and real estate, focus only on the actions of companies doing business in that sector. For example, an energy sector fund will only buy shares of companies involved in the extraction and distribution of coal, natural gas and oil. Meanwhile, a background in the health sector will focus only on the actions of companies that provide medical, pharmaceutical and health care supplies. Sector funds may experience growth that produce good returns for investors, but during bad periods, can lose money faster than well-diversified funds.

Global Funds
Among the funds shares international, those that focus on small and non-US companies or emerging markets or countries, such as Brazil, China or India, carry more risk than international funds that focus on large companies or developed regions such as Europe. Small countries and less developed economies are subject to greater volatility and are less likely to remain stable in an economic crisis, but when those regions and economies are growing, investment dividends typically generate higher than average.

Small cap funds
Other funds investment high risk, small-cap funds have shares of companies valued at less than U.S. $ 300 million. Funds investment in small companies are generally riskier than funds shares of larger companies, but are actually risky, especially in volatile markets.

Active Management
The funds investment high risk are managed actively. This means that administrators are based on market research or sector strategies, and frequently buy and sell the shares to remain on-line strategy. Frequent transactions on a background of investment result in higher fees and expenses than a fund investment regularly.