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Types Of Mutual Fund

  • Depending on the time of closure, Mutual Funds are divided into 2 major categories—Open Ended or Close Ended.
  • Open Ended

  • do not have a specific date when the scheme will be closed.
  • Types of Open Ended Schemes

    Debt/Income

  • In a debt/income scheme, a major part of the funds are invested in debentures, gilt funds, government securities and other debt instruments. This is a low-risk return investment option which is ideal for investors with a steady income..
  • Money Market/Liquid

  • Investors looking to utilise their surplus funds can invest in these short-term investment options, which provide reasonable returns to investors..
  • Equity/Growth Funds

  • Equity investments are popular forms of Mutual Funds among retail investors. These investments are subject to high-risks in the short term, but investors can expect a high capital appreciation in the long run. If you are looking for long-term benefits and are open to taking risks, growth schemes are ideal investment options for you..
  • Index Scheme

  • These investments replicate the movement of benchmark indices like Nifty, Sensex, etc. So these investments are made as per the market conditions and movements..
  • Sectoral Scheme

  • These funds are invested in a specific sector like IT, infrastructure, pharmaceuticals, mining, etc. or segments of the capital market like large-cap, mid-cap, etc..
  • Tax Saving Schemes

  • As the name clearly suggests, this Mutual Fund scheme offers tax benefits to investors. The funds are generally invested in equities offering long-term growth opportunities. Tax saving Mutual Fund schemes typically have a 3-year lock-in period.
  • Close Ended Schemes

  • These have a specific tenureand income at regular intervals as the funds are invested in equities and fixed income securities. This is ideal for the cautiously aggressive investor, as they can Types of Close-Ended Schemes..

  • You can invest in a close-ended scheme only when it is initially launched. This is known as the New Fund Offer (NFO) period. These Mutual Funds have a fixed period of maturity..

  • Capital Protection: These schemes are mainly aimed at protecting the principal amount while trying to deliver reasonable return to the investors..

  • Funds are invested in high-quality fixed income securities with marginal exposure to equities which have a fixed maturity period..

  • Fixed Maturity Plans: As the name suggests, these are Mutual Fund schemes with a defined maturity period. These schemes do not have any kind of active trading involved and hence the returns are little less when compared to actively managed schemes..

  • Apart from these open-ended and close-ended schemes, there are Interval Mutual Funds, which operate as a combination of open and close-ended schemes. These schemes allow investors to trade units at pre - defined intervals..