munKNEE.com Your Key to Making Money
Mutual fund brochures are written in a language of their own. Every fund sounds impressive on paper. Here is a cynical look at what it really means.
- Core
It really means: Low tracking error, steady asset gathering.
- Diversified
It really means: We will basically buy the index, add a management fee, and then go on vacation.
- Sustainable/ESG (formerly Clean/Green)
It really means: A basket of government-subsidized experiments and/or and whatever clears the latest ESG screening model.
- Impact Focused (formerly Socially Responsible)
It really means: Marketing department approved, but all corporations are evil, so the list is small.
- Deep value
It really means: We will invest in sewing machine or typewriter companies, or any single-digit multiples for reasons that may not be temporary.
- Global growth
It really means: We’ll chase stocks for you in whichever country is most overheated right now.
- Aggressive Growth
It really means: Concentrated exposure to AI, biotech, or the newest thematic ideas.
- Balanced Allocation
It really means: 60% equity ETF / 40% bond fund with tactical shifts explained after the fact.
- Enhanced
It really means: Factor tilts and derivatives layered onto a benchmark.
- Ultra
It really means: Leveraged to the hilt, reset daily.
- Opportunities
It really means: Tactical trades driven by quarterly positioning and potential use of darts.
You need to add High Yield … it basically means the fund buys what nobody else will and it’s called “junk” for a reason. However, to be fair to the corporations who issue the debt, some are trying hard with poor credit ratings.
It also appears “global” includes the United States but “foreign” doesn’t. The distinction is a bit muddy.
And “hedged” is another strange one. Sometimes it means buying futures contracts, other times it just means they keep their loose cash in U.S. funds and that is hedge enough for many.