TYPES OF MUTUAL FUNDS
There are several types of funds offered by asset management of companies in the country. These types are segregated the same based on structure, asset class, investment objective, specialty, and risk in the sections below:
TYPES OF FUNDS BASED ON STRUCTURE
• Open-Ended Funds – this type of fund is open for purchase or for redemption through the year. All purchases as well as redemption of these funds are done at prevailing NAVs. These funds will allow investors to keep investments as long as they want. There are no minimum or maximum limits for investing in these funds. There is always a fund manager who picks the place where investment will be made. These funds also charge a fee that can be higher than passively managed funds because of the active management. Those who can invest along with liquidity. They are considered an ideal investment because they are not bound to any specific maturity periods.
• Close-Ended Funds - funds in which units can be purchased only during the initial offer period. units can be purchased on fixed maturity date. These schemes are often listed for trade on the stock exchange.
• Interval Funds – These funds have features of both open and close-ended funds. If they are opened for purpose of repurchase of shares at different intervals.
TYPES OF MUTUAL FUNDS BASED ON ASSET CLASS
• Equity Funds – these are the funds that invest in equity shares and equity stocks of companies. These types of funds having high risk thus provide high returns. This type of funds especially includes funds like infrastructure, banking, fast-moving consumer goods.
• Debt Funds – Funds that invest In debt instruments example government bonds, company debentures, and other fixed-income assets. As compared to equity funds, debt funds are more stable and fixed returns.
• Money Market Funds – it is also known as cash markets. Invest in liquid instruments example, T-Bills, CPs, etc. They are considered safe investments for those who looking to park surplus funds for immediate but moderate returns.
• Hybrid Funds – this type of mutual fund that invests in more than one asset class. They are a combination of both equity and debt assets. And sometimes they also include Gold and real estate. For example, Canara Robeco Equity Hybrid Fund Growth, etc.
TYPES OF MUTUAL FUNDS BASED ON INVESTMENT OBJECTIVE
• Growth Funds – money is invested primarily in equity stocks with the purpose of providing capital appreciation. It is a long-term investment timeline. They are risky fund ideals for investors. These are risky funds for those who are looking for higher returns on their investments.
• Income Funds – money is invested primarily in fixed-income instruments e.g., bonds, debentures, etc. The purpose of providing capital protection and regular income to investors.
• Liquid Funds – money is invested firstly in short-term or very short-term instruments example T-bills, CPs, etc. with the purpose of providing liquidity. They are low on risk with moderate returns. These are short-term investment timelines.
• Tax Saving Funds – funds that invest primarily in equity shares. Investments made these funds qualify for deduction under the Income Tax Act. These are at high risk but also offer high returns if the funds perform well.
• Fixed Maturity Funds – these are those funds in which the assets are invested in debt and money market instruments where the maturity date is either the same or earlier.
• Pension Funds – these are mutual funds that are invested in with a really long-term goal in mind. The investment in such fund may be split between equities and debt markets. Investment in equity funds, high risk leads to higher returns. Investment in debt funds creates a balance that provides lower but steady returns.
TYPES OF MUTUAL FUNDS BASED ON SPECIALITY
• Sector Funds – funds that invest in a particular sector of the market. For example, Infrastructure funds invest only in those instruments or companies that relate to the infrastructure sector. Returns depend upon the performance of the chosen sector.
• Index Funds – invest in instruments that represent a particular index on an exchange. For example, buying shares representative of the BSE Sensex.
• Emerging Market Funds – investments are made in developing countries that show good prospects for the future. Due to the dynamic political and economic situation, these funds come with a higher risk, prevailing in the country.
• International Funds – also known as foreign funds. Offer investments in companies located in other parts of the world. These companies are in emerging economies. The only companies that will not be invested will be in the investor’s own country.
• Real Estate Funds – funds that invest in companies that operate in real sectors. These funds can invest in builders, property management companies, realtors, and even companies providing loans.
TYPES OF MUTUAL FUNDS BASED ON RISK
• Low Risk – these investments are for those who do not want to take a risk with their money.
• Medium risk – investments that come with a medium amount of risk to the investors. These are ideal for those who are willing to take a risk with the investments and tends to offer high returns.
• High Risk – higher risk higher amount of money. Their money and are looking to build their wealth.

This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being. Further, despite all efforts that have been made to ensure the accuracy and correctness of the information published, White Code Legal and Tax shall not be responsible for any errors caused due to human error or otherwise.