Different types of mutual fund schemes.....

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Based on investment objective,mutual fund schemes can be classified into three broad categories:

• Equity Funds
• Debt Funds and
• Balanced Funds

Equity Funds are invested in equity shares of companies available in stock market. Within equity funds,there can be diversified equity funds, sector funds, ELSS funds, index funds etc.

Debt Funds/Income Funds are invested in fixed interest bearing instruments like bonds, debentures, government securities, treasury bill, certificate of deposits, commercial paper etc issued by corporates and government.

The combination of above two is Balanced Funds, which take minimum of 65% exposure to equity shares and remaining 35% in debt instrument.