SERIES-6 practice question 22 of 35

The profile of the Invesco Utilities Fund stipulates that 80% of its funds will normally be invested in stocks of firms in utilities-related industries. This suggests that the Invesco Utilities Fund is:

Full set: 325 questions
Answer options
A: a sector fund. Correct answer
B: a non-diversified investment company.
C: an asset allocation fund.
D: both A and B.
Correct Answer:
A. a sector fund.
Explanation

Invesco Utilities Fund profile suggests that the fund is a sector fund, which is a specialized fund that invests mainly in stocks within a specific industry. This does not mean that it is non -diversified. As long as it is invested in a portfolio of securities with a value exceeding 75% of its assets such that no more than 5% is invested in any one firm and no more than 10% of any firm’s voting stock is owned, it is considered to be a diversified management company.

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