Vickie recently added the ABC Investco EV Fund to her portfolio. This fund invests in global companies involved in the electric vehicles sector . What type of mutual fund is this classified as?
The correct answer is D. Specialty . According to the Investment Funds in Canada course, specialty funds focus on a specific sector, theme, or investment mandate. Funds that concentrate on areas such as technology, healthcare, precious metals, or electric vehicles fall into this category.
An electric vehicles fund invests in a narrow, theme-based segment of the global equity market rather than following a broad market or traditional growth mandate. The CIFC text notes that specialty funds typically involve higher risk due to limited diversification but may offer higher return potential.
Standard and growth funds are broadly diversified, while resource funds focus specifically on natural resources such as energy or mining. EV-focused investing extends beyond traditional resource classification.
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