Based on the underlying investment objectives and asset classes, Mutual funds in India can be divided into a number of different types. Here are a few of the popular mutual fund categories offered in India:
- Equity Funds: These funds primarily invest in stocks and are suitable for investors looking for long-term capital appreciation. They can further be categorized into large-cap, mid-cap, small-cap, and multi-cap funds.
- Debt Funds: Debt funds invest in fixed-income securities such as government bonds, corporate bonds, and money market instruments. They are ideal for investors seeking regular income and capital preservation.
- Hybrid Funds: Hybrid funds mix equity and debt instruments in their investments. They seek to strike a balance between income generation and capital growth.
- Index Funds: These funds try to match the performance of a particular stock market index, such as the Sensex or Nifty 50.
- Exchange-Traded Funds (ETFs): ETFs are traded on stock exchanges like individual stocks but are similar to index funds. They provide real-time trading flexibility.
- Sectoral and Thematic Funds: These funds invest in particular industries or topics, such as infrastructure, healthcare, or technology. They are appropriate for investors who have an opinion on a specific sector or trend.
- Equity-Linked Saving Schemes (ELSS): Under Section 80C of the Income Tax Act, ELSS provide tax benefits. They have a lock-in period, and you can deduct some of your investment from your taxes.
- Liquid Funds: Liquid funds offer high liquidity and invest in short-term money market instruments. They are perfect for storing extra money or meeting urgent cash needs.
- Gold funds: These funds invest in physical gold or things that have anything to do with gold. They enable investors to benefit from the performance of gold without actually owning any of the metal.
- International funds: These funds make investments in foreign markets. By exposing investors to foreign stocks and bonds, they enable diversification outside of the Indian market.
- Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs): These are specialized funds that invest in either real estate or infrastructure projects. They provide a special route for investing.
- Debt-oriented Hybrid Funds: These funds invest primarily in debt securities while also including a small amount in stocks. They are appropriate for cautious investors seeking a balance between safety and possible capital growth.
- Gilt Funds: With very little credit risk, gilt funds invest in government securities. Investors who are risk averse should use them.
- Fixed Maturity Plans (FMPs): FMPs invest in debt securities and have a fixed maturity period. Their fixed return potential has made them well known.
Before selecting the mutual fund types that match your financial objectives and risk tolerance, it is crucial to understand the investment objectives and risk profiles of each. Additionally, if you want specific advice, you should always think about speaking with a financial advisor.
FOR MORE INFO CLICK THIS SITE:https://learningsharks.in/
FOLLOW OUR PAGE:https://www.instagram.com/learningsharks/?hl=en