A breakdown of a mutual fund's assets by investment class; in other words, how much is in stocks? How much in bonds? How much in cash?
The percentage listed as Stocks incorporates only the portfolio's straight common stocks. Cash encompasses both actual cash and cash equivalents (fixed-income securities with a maturity of one year or less). Negative percentages of cash indicate that the portfolio is leveraged, meaning it has borrowed against its assets to buy more securities or that it has used other techniques to gain excess exposure to the market. Bonds include every fixed-income security with a maturity exceeding one year, from government notes to high-yield corporate bonds. Other includes preferred stocks as well as convertible bonds and convertible preferreds.
These composition figures reveal important information about a mutual fund, including the extent to which it is living up to its billing. Does your equity fund, for instance, hold 35 percent of its assets in bonds? The composition figures are also useful for judging how bullish a fund is. A large proportion of assets in cash, for example, might indicate a defensive posture.