3 Mutual Funds Built for the Next Market Correction

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It's starting to seem like a broken record. Some talking head on TV or popular financial journalist is predicting that dark days are ahead for those long the market. The naysayers have been wrong; they usually are. However, a market correction is inevitable. It will happen at some point. It always does. Mutual fund investors often take the speed bumps in stride. They're paying someone else to pick stocks and make asset allocation decisions. They're unloading the stress and learning curve on someone else, but at the end of the day it's still their money that's at risk. Thankfully, not every mutual fund is built the same. There are actually many vehicles out there that either don't necessarily correlate to the general equities market or actually benefit from a market sell-off. Let's go over a few of these mutual funds that nervous investors convinced that a Wall Street correction is truly coming this time may want to consider. Merger Fund (MERFX) A mutual fund with the word "merger" in its name may seem risky, but Merger Fund actually engages in a risk-mitigating practice called arbitrage. Let's say that Paula's Peanut Butter wants to acquire Charlie's Chocolates. The sides can agree on Paula's paying $10 a share for Charlie's, but that doesn't mean that Charlie's goes to $10 immediately. It can go above $10 if the market feels that a bidding war will break out, but more than likely it will trade at a discount given the uncertainty of the deal going through and the months that it may take for the acquisitions to be completed.