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  • Investment style refers to the general strategy a fund uses. The most common styles are growth, value, and core.

    These funds focus on companies whose earnings are expected to grow faster than inflation and the economy. These stocks can benefit when prospects remain good for growth. However, they may suffer steep drops when their earnings disappoint.

    These funds feature stocks that may be inexpensive compared with the company’s earnings, the market, or its own history. Often, such stocks are temporarily out of favor, providing a long-term opportunity as investors recognize the value in the stock. Value investments offer good return potential. However, the value approach carries the risk that the market will not recognize a security's intrinsic value for a long time, or that a stock judged undervalued may actually be appropriately priced.

    Core funds invest in both growth and value stocks in an effort to combine the best aspects of both. The return and risk potential of core funds will vary, but should fall between that of growth funds and value funds.