Diversified funds are investment vehicles that pool money from multiple investors to buy a variety of assets, such as stocks, bonds, and real estate. The main goal of these funds is to spread risk across different investments, which can help reduce the impact of poor performance from any single asset. This strategy is based on the principle that not all investments will perform poorly at the same time. These funds can be actively managed, where a fund manager makes decisions on asset allocation, or passively managed, where they track a specific index. Examples of diversified funds include mutual funds and exchange-traded funds (ETFs). By investing in diversified funds, individuals can gain exposure to a broader market without needing to select individual securities themselves.