Mutual Fund is a company / trust that collect money from a number of investors who share a common investment objective. Mutual Fund is a company / trust invests the money in equities, bonds, money market instruments and/or other securities. Every investor gets a holdings of fund based on his investment. The profit / loss are distributed to the every investor based on calculating Net Asset Value.
Types Of Funds
|
S.No |
TYPES OF FUNDS |
Mutual Fund company invest on |
|
1 |
Growth / Equity Mutual Funds |
Equity |
|
2 |
Debt / Income Mutual Funds |
Debt, money market and other fixed-income instruments (Treasury bills,
government bonds, certificates of deposit, and other high-rated securities.) |
|
3 |
Balanced or Hybrid Mutual Funds |
Both equity and debt instruments |
Growth / Equity Mutual Funds Classification
|
Classification |
Mutual Fund company / Trust invest on |
|
Small-Cap Funds |
small market capitalization companies |
|
Mid-Cap Funds |
medium market capitalization companies |
|
Large-Cap Funds |
Large market capitalization companies |
|
Multi-Cap Funds |
All companies of market capitalization |
|
Sector or Thematic Funds |
Equity companies like FMCG and IT |
|
Index Funds |
High performance Index companies so
return will be more |
|
Equity-linked savings scheme (ELSS) |
tax deductions companies which
cover Section 80C of the Income Tax Act, 1961 by investors. |
Debt Mutual Funds classification
|
Classification
|
Mutual Fund company / Trust invest in
|
|
Dynamic Bond Funds
|
Companies which modify portfolios based fluctuations in the interest rates.
|
|
Income Funds
|
Securities with a long maturity period (5 years) so it provides stable returns
over time.
|
|
Short and Ultra ShortTerm Debt Funds
|
Securities with a maturity period (3 years) so it provides Average returns over
time.
|
|
Liquid Funds
|
Assets and securities which mature within ninety-one days.
|
|
Gilt Funds
|
High-rated government securities. It is for this reason that these funds
possess lower levels of risk and are apt for risk-averse investors.
|
|
Credit Opportunities Funds
|
Low rated securities that have the potential to provide higher returns.
Naturally, these funds are the riskiest class of debt funds.
|
|
Fixed Maturity Plans
|
Fixed income securities (government bonds).
|
Balanced or Hybrid Mutual Funds classification
|
Classification |
Mutual Fund company / Trust invest in |
|
Equity-Oriented Hybrid Funds |
least 65% of its portfolio in equities while the rest is invested in
fixed-income instruments. |
|
Debt-Oriented Hybrid Funds |
Debt-oriented hybrid funds allocate at least 65% of its portfolio in
fixed-income instruments such as treasury bills and government securities, and
the rest is invested in equities. |
|
Monthly Income Plans |
debt instruments and aim at providing a steady return over time. The equity
exposure is usually limited to under 20%. You can decide if you would receive
dividends on a monthly, quarterly, or annual basis. |
|
Arbitrage Funds |
aim at maximising the returns by purchasing securities in one market at lower
prices and selling them in another market at a premium. However, if the
arbitrage opportunities are not available, then the fund manager may choose to
invest in debt securities or cash equivalents. |
|