Uncommon funds

Life Cycle Fund or Target funds

Funds that adjust their portfolios to a more conservative stance as years pass. An example: Fidelity Freedom 2030 (FFFEX).

Bear Fund

A Fund that moves opposite to that of the market. Examples are Rydex Ursa (RYURX) that is the inverse of the S&P 500 and the Potomac OTC/Short (POTSX) that is the inverse of the Nasdaq 100.

Stable value fund

Stable value funds are essentially intermediate-term bond funds that carry a guarantee of a fixed net asset value (like money market funds); generally only offered in IRA's and 401(k)'s.

 "Enhanced Index" funds

Funds that attempt to beat the index's return by better stock-picking or adding fixed-income securities to the portfolio. An example: Vanguard Growth and Income (VQNPX). 

Fund of funds

A fund that invests in other funds. An example, funds  from FundX.

Types of Funds

Fund Objective

Morningstar has 48 narrow categories for Mutual Funds as listed below, 18 for US Stocks, 10 for International Stocks, 11 for Taxable Bonds and 9 for Municipal Bonds. 

U.S. Stock Funds
Large Value
Large Blend
Large Growth
Mid Value
Mid Blend
Mid Growth
Small Value
Small Blend
Small Growth

Note: The above 9 categories are captured in a matrix below called the StyleMap (Registered) by Morningstar. 

For example, the shaded area depicts a small cap growth fund.

Specialty Communications
Specialty Financial
Specialty Health
Specialty Natural Resources
Specialty Real Estate
Specialty Technology
Specialty Utilities
U.S. Hybrid
Convertibles

International Stock funds
Europe
Latin America
Diversified Emerging Markets
Pacific/Asia
Pacific/Asia (ex-Japan)
Japan
Diversified Foreign
Diversified World
International Hybrid
Specialty Precious Metals

Taxable Bond Funds
Government Long-Term
Government Intermediate-Term
Government Short-Term
General Long-Term
General Intermediate-Term
General Short-Term
General Ultrashort-Term
Specialty International Bond
Specialty High-Yield
Specialty Multisector
Specialty Emerging Markets Bond

Municipal Bond Funds
Muni National Long-Term
Muni National Intermediate-Term
Muni Single State Long-Term
Muni Single State Intermediate-Term
Muni Short-Term
Muni California Long-Term
Muni California Intermediate Term
Muni New York Long-Term
Muni New York Intermediate Term

Then there are safe Money Market funds that so not lose principal (may not be FDIC insured). 

Stable-Value funds offered in IRA's and 401(k)'s offer the safety of money market with bond-like yields.
 
Active and Passive (Index) funds

The manager(s) of an actively managed fund seeks to exceed returns of financial markets by the aid of research, forecasts and his/her judgment. A passively managed fund such as an index fund simply tries to mirror the fund's performance to an index (e.g. S&P 500).  Index funds are fully invested with almost no cash, actively managed funds may have a nominal cash position or a unusually high cash position. High cash positions can protect the fund in a market downturn but also tend to lower fund performance when the market rallies. 

Not all index funds are created equal - some have higher expenses. 

A "closet index fund" is a actively managed fund that has performance close to that of an index fund but with much higher expenses.