Different Types of Mutual Funds in India

Mutual funds are the future of investments that have captivated the Indian markets for last decade. These funds offer huge returns than the traditional saving plans albeit some risks that can be marginalized in schemes with SIP Mutual funds. Market, stocks, funds, equity, debt are some of the technical terms that new comers must get involved for making their progress in the financial market respectively. Here we have narrowed down different types of mutual funds in India based on their multiple genres.

On the basis of structure funds can be open ended, closed and interval funds as the name suggests have their specific use as preferred by the clients only. Open funds are ready to purchase throughout the year with more active regular monitoring while close ended funds can only be purchased through the initial offerings and can be redeemed only after the maturity date or shares sold back at the current prices. On the other hand interval funds are mixed of both that have multiple intervals of opening like open funds and specific dates when they are closed too.

Based on assets Mutual funds are classified into Equity Funds, Debt Funds, Money market funds and Balanced/hybrid funds. Equity funds have high risks and high returns too albeit the main stocks/share of the market are first starts in equity only. Better suited for long term investments and growth they are tax free for some time and then charged based on the income generation respectively. Another quite famous term is debt funds which are directly part of core structure of the company stocks e.g. govt. bonds, company debentures and other assets. In balanced funds they are mixed with equity and debt funds with one of them higher than the others is common.

There are also multiple objective based funds which have become quite popular with Indian population. Pension funds, Growth funds, Income funds, Tax Saving funds, fixed maturity funds etc that are started with specific objective to get the investment back in sophisticated manner. There are also sector funds, index funds, emerging market funds, international funds, real estate funds, gift funds, exchange traded funds etc based on their specialty.

There are always risks involved in Mutual funds as the whole investments are put in the markets only. If they crash you are bound to the lose investment. High risks, Medium and low risks are also categorized by the expert professionals who have based these on respectively the risk on investing with specific funds in terms of return on investment.

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