There are different types of mutual funds designed to meet the needs of investors with varying financial goals, risk appetites, and investment horizons.
If you want to learn mutual funds in detail, explore our Mutual Fund Learning Hub for beginner-friendly guides, fund categories, investing concepts, SIP knowledge, and portfolio basics.
Mutual funds can mainly be categorized based on their investment objective and maturity period.
Mutual Funds Based on Investment Objective
Equity Funds – Invest primarily in stocks and aim for long-term capital growth.
Debt Funds – Invest in fixed-income securities like bonds and government securities.
Balanced or Hybrid Funds – Invest in both equity and debt instruments to balance risk and return.
Liquid or Money Market Funds – Invest in short-term instruments and offer high liquidity.
Gilt Funds – Invest mainly in government securities and carry lower credit risk.
Index Funds – Track a specific market index such as the Nifty 50 or Sensex.
Mutual Funds Based on Structure (Maturity Period)
Open-Ended Schemes – Investors can buy or redeem units anytime.
Close-Ended Schemes – Investments can usually be made only during the initial offer period and redeemed after maturity.
Other Types of Mutual Funds
Sector-Specific Funds – Invest in a particular sector such as banking, IT, or pharma.
Tax Saving Funds (ELSS) – Offer tax benefits under Section 80C and come with a lock-in period of 3 years.
All these mutual fund categories are explained in detail in the upcoming sections of our Mutual Fund Learning Hub.
Important links:
1. What is a NAV (Net Asset Value)?
2. What are the benefits of investing in mutual funds?
3. What are the risks associated with mutual funds?
