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Types of mutual fund in India based on assets classification

As you know there are various mutual fund which are available in the market but what are the categories in which we can bifurcation them. Mutual fund can be bifurcated on the basis of asset class , on the basis of structure, on the basis of investment objective and on the basis of goals.

    Today we are going to go through the bifurcation of mutual funds on the basis of asset class.

 1. Equity fund
2. Debt fund
3. Money market fund
4. Hybrid or balance fund
5. Sector fund
6. Index fund
7. Tax saving fund
8. Funds of fund
 1. Equity fund
    In this type of fund fund manager invest the fund in direct equity market. This type of fund provide the higher return with the higher risk. So person with long term investment planning can go for this type of funds.


2. Debt fund
   These type of  fund invest the amount in fixed return instrument like debenture, bind, fixed deposits etc. This type of fund are know for fixed return with highest safety of money. So person who is planning to invest for small period or person who don't want to risk the fund can use this type of fund for investment. Normally retired person can use this fund to safeguard the money and gain return at the same time.


3. Money market fund
    These fund invest their money in instruments like Treasury bills. In this type of fund person can get the money immediate with moderate return. These type of fund can be purchase by person who is planning to invest their excess money for short period say 1 day or 1 week.


4. Hybrid / balance fund
    In this type of fund fund manager investment the corpus in different type of assets. Normally this fund invest in equity and debt  so as to balance the risks of  violet market. The fund is suitable for the investors who is willing to invest the fund for period say 3 or 6 months so as to earn the benefit of market along with safe guarding the corpus.


5. Sectoral fund
    The investment is made in particular sector say pharma or infrastructure sector. The investment is restricted to particular sector. The return and risk is directly associated to the performance of particular sector. This type of fund can be purchased by the investors if is bullish on the performance of particular sector.


6. Index fund
    These funds represent the specific index on the exchange. The return is directly associated to the performance of said index like S&P 500 INDEX. Normally the person who want to test the performance of index.


7. Tax saving fund
    The said fund same as equity fund as it invest in majorly in equity market. This funds provide the income tax benefit under the Income Tax Act. The risk factor is same as of equity funds. Because of higher the risk the higher reward is expected. The person who is liable to pay tax and want to save the tax along with investment this is the best investment option.


8. Funds of fund
    In this the corpus is invested in other mutual funds and the return are dependent on the performance of said fund. Normally this type of fund is taken with the motive of diversifying the fun so as to minimize the risk of losing the money.


    Hope above information was useful to you, comment below for any questions.

Comments

  1. UnknownDecember 3, 2018 at 5:34 PM

    Gratitude for sharing info about types of mutual funds in India based on assets classification. I have found this info very useful. For me getting personal financial planning advice has become very important as it is very challenging to make a custom plan. Do you know about a good planner?

    ReplyDelete
  2. sekarkumar zMarch 27, 2019 at 6:33 PM

    Great explanation... apart from this there are so many mutual funds are in mutual fund scheme. Making more money is about to choose the correct scheme of a mutual fund.
    how to invest in mutual funds
    Financial advisor in Chennai

    ReplyDelete
  3. SandyJanuary 18, 2020 at 5:17 PM

    It is really quality & outstanding post. keep it up!

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