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Investment | November 26
What are Mutual Funds and their types?

Mutual funds are a form of investment that pool money from various investors to invest the collected funds in securities. These funds get managed systematically and the investors pay a small fee for such services.

Both retail and institutional investors can put their money in mutual funds. Mutual funds are also a great form of investment for new investors who aren’t acquainted to manage their stock market investments on their own.

Types of Mutual Funds

Mutual funds can be segmented into different categories based on their asset classes, structures, and investment objectives. Let’s take a look at the different types of mutual funds that you can invest in.

Based on Asset Class

· Equity Funds

· Debt Funds

· Money Market Funds

· Hybrid Funds

Based on Structure

· Open-Ended Funds

· Closed-Ended Funds

· Interval Funds

Based on Investment Goals

· Growth Funds

· Value Fund

· Sectoral Fund

· Index Fund

·  Income Funds

· Liquid Funds

· Tax-Saving Funds

· Exchange Traded Funds

·  International Equity Funds  

Let’s discuss in brief about a few types of mutual funds that you can invest in.

Equity Funds

Equity funds pool money from investors and invest it in the shares of different companies. When you invest in equities, the returns or losses depend on the movement of the market value of those stocks. Investments in equity funds come with a greater risk as compared to debt funds.

Debt Funds

Debt funds pool money from investors and put that money in fixed income securities such as bonds, treasury bills, gilt funds, or liquid funds. These funds are less risky.

Money Market Funds

Money market funds pool money from investors and invest that money in money market securities such as bonds, treasury bills, and certificate of deposit (CDs). These funds are usually governed by banks or the government, and are hence less risky.

Hybrid Funds

Hybrid funds are a combination of equity funds and debt funds. These funds pool money from the investors and invest that money in more than one type of investment securities, such as stocks and bonds. These funds are perfect for beginners.

Now that we have talked about the various types of mutual funds, please feel free to share your opinions on investing in mutual funds. In case you have any more questions, you may connect with our financial experts at 0161-4155000.

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Important Message The information contained in this file is provided for informational purposes only, and should not be construed as legal advice on any matter. The content and interpretation of the law addressed herein is subject to revision. We disclaim all liability in respect to actions taken or not taken based on any or all the contents of this file to the fullest extent permitted by law. Every effort is made to avoid errors. In spite of that, errors and discrepancies may creep in. It is expressly stated that neither Findoc Investmart Private Limited nor any of the contributors of updates will be responsible for any damage to anybody on the basis of this document. Readers are, therefore, requested to cross check with the original sources e.g. Government publications, Orders, Judgments etc., before taking any action or making any decision. These services are being provided through our group companies Findoc Capital Mart Pvt Ltd and Findoc Finvest Private Limited

Attention Investors
  • 1. Stock Brokers can accept securities as margin from clients only by way of pledge in the depository system w.e.f. September 1, 2020.
  • 2. Update your mobile number & email Id with your stock broker/depository participant and receive OTP directly from depository on your email id and/or mobile number to create pledge.
  • 3. Pay 20% upfront margin of the transaction value to trade in cash market segment.

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