You already know that mutual funds are a good way to save for retirement. Not only do they limit risk by spreading your money around – known as “diversification” in investing parlance -- they give you the comfort of knowing a professional money manager is keeping tabs on your savings.

But with so many different funds available, picking the right ones for you can be daunting. What's the difference between growth and value, mid-cap and small cap, fixed-income and equity? This primer will break down the different types of mutual funds.

Let's start with the basics. Generally, there are two types of funds, those that invest in stocks -- called "equity" funds -- and those that invest in bonds, known as "fixed-income" funds. You may have also heard of "blended" funds, which do just that -- invest in a little of both.