You might confuse with the title above. The mutual fund is the portfolio of variety investment. The manager of mutual fund combines variety investment in order to get return. The experienced manager will use stock, bond, index, etc.
Equity fund manager will invest at different characteristics stock. Meanwhile, the bond fund uses variety bond. Balanced fund or hybrid fund use stock, bond, index, and money market. Lifestyle is same too. They will plugs with the investor's style.
Do not think the mutual fund portfolio is enough. You may diversify your fund to reduce your risk. Some diversification that writer suggests i.e.:
1. Diversified company You can buy mutual fund from variety company. It is a portfolio too. Surely, you can find the kind of mutual fund. You can choose reputable company like Templeton, Vanguard, Schwab, etc.
2. The variety of fund You should not put your money at equity funds only. You can combine equity fund, bond fund, index fund, money market fund, etc.
3. The classes of investment You can buy any kind of equity find. For example, you can buy growth funds or income funds. Growth fund and income fund has different character. Growth funds suits with long-term investment. Therefore, you can combine it. Another example, some mutual fund uses bond for their investment. They can invest at specific bond like corporate bond, government bond, saving bond, etc.
Unfortunately, this strategy is expensive. You must have more money to buy much mutual fund. If you have little money, you can ignore this strategy.
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