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Home Research & Statistics Statistics ICI Classification Definitions Classification Definitions

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Exchange-Traded Fund (ETF) Investment Objective Definitions

Classifications are made by reviewing prospectuses for language included in these definitions.

Equity Funds

Domestic Equity

Broad-Based

Total market funds use the total domestic equity market as the universe of securities from which to select.

Large-cap funds invest primarily in companies with large market capitalizations, which are generally more than $5 billion or in companies with both medium and large market capitalizations.

Mid-cap funds invest primarily in companies with medium market capitalizations, generally ranging from $1 billion to $7 billion or in companies with both small and medium market capitalizations.

Small-cap funds invest primarily in companies with small market capitalizations of up to $2 to 2.5 billion.

Other funds seek investment returns that correspond to a domestic equity index not primarily dependent on market capitalization or sector or pursue strategies that narrow fund investments, such as dividend-focused or socially responsible investing.

Sector/Industry

Consumer funds invest primarily in companies engaged in the manufacture, sale, or distribution of consumer staples or consumer discretionary products and services.

Financial funds invest primarily in financial service companies, including banks, brokerage firms, and insurance companies.

Health funds invest primarily in healthcare companies, including drug manufacturers, hospitals, biotechnology, and other related fields.

Natural resources funds invest primarily in companies engaged in the exploration, distribution, or processing of natural resources.

Real estate funds invest in companies focused on real estate.

Technology funds invest primarily in companies engaged in the development or distribution of high technology and telecommunication products.

Utilities funds invest primarily in equity securities of public utilities including electric, gas, and water service providers.

Other sectors funds invest primarily in equity securities of a specific industry not included under the above categories.

World Equity

Global funds invest primarily in equity securities traded worldwide, including equity securities of U.S. companies.

International funds invest in equity securities of companies located outside the United States but do not include funds focused predominantly on companies based in emerging markets.

Regional funds invest in companies that are based in a specific part of the world but do not include funds focused predominantly on companies based in emerging markets.

Single country funds invest in companies in a single country but do not include funds focused on countries classified as emerging markets.

Emerging market funds invest primarily in companies based in less-developed countries of the world.

Hybrid Funds

Hybrid funds invest in a mix of equity and debt securities. 

Bond Funds

Taxable Bond

Domestic government funds invest in taxable bonds issued, or backed, by the U.S. government, and include mortgage-backed securities.

Domestic corporate funds invest in bonds issued by U.S. corporations. Funds investing in both corporate and government bonds are included in this category.

Domestic high-yield funds invest in lower-rated corporate bonds and floating-rate securities.

International/Global (world) bond funds use the global bond market as the universe of securities from which to select.

Municipal Bond

Domestic municipal bond funds invest in municipal bonds issued by a state, municipality, county, or special purpose district.

Commodity Funds

Commodity funds, which include funds that are both registered and not registered under the Investment Company Act of 1940, invest primarily in commodities, currencies, and futures.


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