Analyze the characteristics of each fund recommendation of the type of investor to which each fund is suited.

Mutual funds | Business & Finance homework help

The Vanguard 500 Index Fund is a passively managed fund that tracks the S&P 500 Index. It is highly liquid, and can be traded freely throughout the day. Because it contains large-cap companies, this fund has low management fees and expenses relative to other actively managed funds. This makes it ideal for investors who are looking for a low-cost, broad market exposure with less volatility than more concentrated positions in individual stocks or sector funds. This fund is suitable for long-term investors seeking capital appreciation through exposure to wide range of large cap companies in U.S markets.

The PRIMECAP Odyssey Stock Fund seeks to achieve long-term growth by investing primarily in mid and large cap domestic stocks selected using bottom up stock picking techniques of PRIMECAP’s managers. The portfolio consists of outperformance potential holdings which means that higher returns come with greater risk profile as compared to index tracking funds such as the Vanguard 500 Index Fund discussed above. Therefore this type of fund may be suitable for more active investors (such as moderately aggressive individuals) looking to capitalize on broader economic trends while potentially outperforming their benchmark indices over longer periods time.