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Sometimes a family name gives everything away. This is often true of fund families.

Mutual fund companies typically have a variety of offerings for investors -- some firms with a handful, some with more than 100. Fund families, in addition to developing a reputation based on their funds' performance, often become associated with a particular brand of investing.

As a quick example, let's look at two fund families that have in common stellar reputations and histories of strong returns, but diverge when it comes to investing style. Funds from the


family are known for investing in stocks and industries such as technology that offer the potential for high growth, as well as high risk. Conversely, Vanguard funds have built a name for offering index funds, which try to match the performance of a stock index such as the

S&P 500

while keeping expenses down.

Of course, some fund families are known for offering a broad array of fund offerings. Take Fidelity, which has more than several hundred offerings in its stable, from its Select funds that focus on sectors such as utilities and biotechnology to funds with a very broad mandate to money market funds. (One of the benefits of owning funds from within one fund family is that, typically, you can transfer your money from one fund into another without triggering any sales charges.)

In addition to checking out historical performance and investing style when regarding fund families, investors need to keep in mind the issue of diversification. Some investors opt to invest in a variety of funds under the umbrella of one family, which is fine if they are getting a broad enough segment of the market from the various funds.

But owning several funds from a family that has all of their offerings adhere to one style of investing -- aggressive growth or value, say -- exposes investors to certain risks. For example, let's say you have five funds from XYX Asset Management Co.: XYZ Aggressive Growth Fund, XYZ Overseas Aggressive Growth, XYZ Biotechnology, XYZ Internet and XYZ Technology. These funds sound different, but all five are investing in high-growth, high-risk areas. In fact, their portfolios of stock holdings may overlap significantly (not just in this hypothetical situation, this happens in the fund world quite often). That is not diversification, and it can be very damaging to your wealth.

Get to Know the Families

To be a smart mutual fund investor, you need to know about the differences in the mutual fund families. Nobody covers mutual funds better than

; every day, you'll find new stories about fund families in the Personal Finance section. Before you join a family, read these articles to find out what you're getting into:

Can Investing in Too Many Funds From One Family Get Too Close for Comfort?