Unlike what the name seems like, Mutual Fund is not a single investment scheme. There are various types of Mutual Funds in India. Amongst the diversity of options available in mutual funds, you get to choose your investment plan as per your convenience. Here is given a categorical classification of the Mutual Funds.
Mutual Fund types based on structure:
- Open ended funds
- Close ended funds
- Interval funds
Mutual Fund types based on asset class:
- Equity funds
- Debt funds
- Money market funds
- Balanced or Hybrid Funds
Mutual Fund types based on investment objective:
- Growth funds
- Income funds
- Liquid funds
- Tax saving funds (ELSS)
- Capital protection funds
- Fixed maturity funds
- Pension funds
Mutual Fund types based on specialty:
- Sector funds
- Index funds
- Funds of funds
- Emerging market funds
- International funds
- Global funds
- Real estate funds
- Commodity focused stock funds
- Market neutral funds
- Inverse/leveraged funds
- Asset allocation funds
- Gift funds
- Exchange traded funds
Mutual Fund types based on the risk factor:
- Low risk funds
- Medium risk funds
- High risk funds
Each type of investment scheme in the mutual funds is fabricated according to the benefit of the investors as well as the company whose share units are bought. Still, it is not easy to choose a scheme out of such huge variety of choices provided. In order to narrow it down, you should determine a few things in accordance with your interest and preferences. For example, you will have to decide your goals. If it is to multiply the money quickly, then you must make sure for how much time are you willing to wait. If you can feel comfortable with high risk plans then you are free to proceed with them. In most cases the plans that involves the highest risks, gives maximum returns.
