The Different Types Of Mutual Funds


There are several distinct types of mutual fund schemes available today, each designed to meet the specific requirements of a particular group of investors. The majority of mutual funds fall into one of three categories. Equity Funds, often called Growth Funds These investments focus mostly on equity, often known as shares of various corporations. The accumulation of wealth or an increase in value for the investment is the key goal. They have the potential to provide a bigger return, and as a result, the investments in them should be held for a longer period of time. These are some examples: "Large Cap" funds are funds that invest largely in businesses that are already quite large and well established. "Mid Cap funds" are investment vehicles that focus on mid-sized businesses. funds that invest mostly in enterprises of a medium-sized size. "Small Cap" funds are funds that invest in firms that are not very large. "Multi Cap" funds invest in a variety of different-sized firms, including both large and small ones. "Sector" funds are funds that invest in businesses that are all part of the same "sector" of the economy. For e.g. Technology funds that do not invest in any businesses other than those related to technology "Thematic" funds are funds that invest in a certain industry or sector. For e.g. Infrastructure funds that invest in businesses that would profit from the expansion of the infrastructure sector are called infrastructure investment funds. Tax-Saving Funds Funds of Income or Fixed Income from Bonds or Fixed Sources These are investments that are made in Fixed Income Securities, such as Government Securities or Bonds, Commercial Papers and Debentures, Bank Certificates of Deposit, and Money Market instruments such as Treasury Bills, Commercial Paper, and so on. These investments are less risky than others and are good options for anyone looking to generate income. Some examples are liquid funds, short-term funds, floating rate funds, dynamic bond funds, gilt funds, and corporate debt funds, among others. Hybrid Funds These make investments in both equities and fixed income, giving investors the opportunity to benefit from the potential for growth as well as the generation of income. Some examples include pension plans, child plans, and monthly income plans, as well as aggressive balanced funds and conservative balanced funds. Other examples include these types of plans and others.