What is a Diversified Common Stock Fund?
A diversified common stock fund is a type of mutual fund that invests exclusively in shares of common stock.
How Does a Diversified Common Stock Fund Work?
Diversified common stock funds may comprise any combination of common stocks. The portfolio composition usually includes common stock issued by blue-chip and other reputable and stable companies of varying market capitalization size. The risk level associated with a given portfolio is dependent upon the common stocks chosen.
Why Does a Diversified Common Stock Fund Matter?
Diversified common stock funds provide fund managers with the opportunity to employ a wide range of investment strategies provided that the investments remain exclusively in shares of common stock.