Types of mutual fund schemes...

[jiten702]

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

• Equity Funds,
• Debt Funds and
• Balanced Funds.

Equity Funds invest 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 invest 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.

[Dividend]

Great information about the mutual funds.Investing in mutual funds or stocks depends on how much risk vs. return you are prepared to handle. If you want a higher return, then you must accept a higher risk.So every person has a different criteria about investment.

[Donald]

Hi jiten702,
This information must be helpful for those who just jumped in stock market field.
Thanks for sharing and differentiating mutual funds types.

[karinabartram]

Wide variety of mutual fund schemes exists to cater to the needs such as financial position, risk tolerance and return expectations etc. Thus mutual funds has variety of flavors. Investors can go for picking a mutual fund might be easy. There are over hundreds of mutual funds scheme.