Category: Types Of Mutual Funds

There are various types of mutual funds exist in the markets for different people. Basically there are four types of mutual funds.

  1. EQUITY FUNDS :   
  • This type of investment funds deals in equities i.e. shares of Public Ltd companies.
  • These types of funds have the potential to generate much higher return than the market and highly suggested for long term investment.
  • The primary objective of these funds is to create wealth or capital appreciation
  • This funds can be sub categorized in following Funds
  • Large Cap Funds are those funds which invest in companies that are well-established and have a significant market share. These companies dominate the industry.
  • Mid Cap Funds are those funds which invest in companies in which  market cap is above Rs 5,000crore but less than Rs 20,000crore
  • Large & Mid Cap Funds is a combination of large & mid cap funds.
  • Multi Cap funds are funds that invest in mixed of large, Mid & Small companies.
  • Dividend Yield funds are those funds which invest in companies which generally pay dividend
  • FOF stands for FUND OF FUNDS, An investment strategy of holding a portfolio of someone else funds rather than invest directly in bonds securities or Stocks.
  • Focused Funds deals in limited no. of stocks & in limited no. of sectors. It doesn’t have diversified mixed or broad positions in its portfolio.
  • Index Funds are funds that invest in an index stocks like NIFTY BANK NIFTY in the proportion of the weight of the stocks.
  • Sectoral Funds are that funds which invest in one type of business for e.g. Banking Funds that invest in banking companies, Technology  Funds that is for IT Compines  FMCG Funds, Pharma Funds 
  • Small Cap Funds are those funds which invest in small companies whose market cap is less than 5000crore.
  • Flexi Cap funds is similar to Multi Cap funds but there is no restrictions of limit for investment  in small mid & Large cap funds.
  • This type of investment funds not only deals in equities i.e. shares of Public Ltd companies but also in other class of assets like debt bonds & other assets depends on the objective of the schemes.
  • These funds are less risky in compare to equity funds.
  • Example of these type of funds is balance advantage fund, equity hybrid fund, Equity Saver fund, Retirement Saving Fund.
  • These funds basically deals in fixed income securities like government bonds or securities commercial papers or debentures money markets instruments etc.
  • These are considered as safer investment and suitable for income generation
  • E.g. of these funds are liquid funds GILT Funds Ultra Short Duration Funds Dynamic Bond Corporate Bond Etc.
  • These funds are deals with investment related to Metals, Gold, Silver, Oil & Natural Gas & Agricultural Goods Etc.
  •  E.g. of these funds are Gold Funds Gold Saving Funds Etc