Confused after seeing so many different kinds of funds? Are you a new Investor? Various funds like-large cap, mid cap, small cap, multi-cap, diversified, focused, sector, hybrid, and so on make you dizzy as well. Well, no more of those confusions, here is a quick guide for you to know about the different Types of Mutual Funds in India.
Debt Mutual Fund Schemes
1. Liquid Funds: Investment clearly into liquid money market instruments.
2. Ultra Short-Term Funds: Investment made mostly in short-term debt securities with a little in long-term debt securities.
3. Fixed Maturity Plans: It basically is like a fixed deposit scheme and is a good tax saving alternative.
4. Short term funds: It basically invests in debt securities for a period maturity of 1 to 3 years on an average.
5. Dynamic Bond Funds: It invests in a diversified way in different debt and money market instrument with varying maturity.
6. Income Funds: It basically means investment in corporate bonds, government bonds and other money market instruments with a longer maturity period.
1. Arbitrage funds: They basically are not into equity but are treated for tax purposes and are a great way for higher taxpayers to take care of their money for a short time.
2. Large-cap funds: They invest in big companies and are these investments are considered quite safe as the companies involved are establishes players.
3. Diversified Funds: Suitable for investors of moderate risk appetite as these funds are spread over different market capitalization depending on the fund manager’s view of the market.
4. Smallcap funds: Smallcaps invest in small companies and the risk involved is very high because there is not sufficient information available of the concerned companies in the public platform but the return they provide can be phenomenal.
5. Midcap funds: They invest in mostly medium-sized companies so the risk profile is high. These investments are risky as full potential cannot be realized about the companies. If they work positive returns are great or at times not.
So the above was a brief overview of what different Types of Mutual funds in India are available for the investors.
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