Asset Allocation is a term used to express your choice among different types of asset classes and styles. You might have growth or value funds, which are mutual funds typically focused on companies that are growing quickly or companies that are perhaps out of favor temporarily, and are typically priced cheaply relative to their assets, profits and potential. Value funds are betting that these stocks have a lot of room to grow. Your fund may be international (holding shares of international companies) or domestic (holding shares of U.S. companies only). It might be large cap (focused on huge corporations), mid-cap (medium-sized companies), or small-cap (smaller companies).