Specialized funds focus on very specific industries, including commodities, regions, or other segments of the market. These funds include sector funds, balanced funds, asset allocation and target date funds. Using these funds, investors can gain access to banking, real estate, chemicals, energy or telecommunications. These funds are ideal for investors seeking exposure to specific areas of the market without purchasing individual stocks. Since these funds offer narrow exposure to a market, they have much higher profit potential, but also carry more risk as they lack diversification.