Different Types of Mutual Fund Schemes in India

Mutual fund invests the money of many investors in a bulk in different securities such as shares, debt securities, money market securities, gold instruments or a combination of these. These securities are professionally managed on behalf of the investors to give them higher return. Investors own units & the increase in value of the investments are also passed on to the investors in proportion to the number of units owned by them.

Mutual Funds are better option for the new investors who does not have more knowledge about the equity, debt , money market etc.

Schemes Offered by Mutual Funds according to Maturity Period

  • Open Ended Scheme: Open-ended mutual fund schemes do not have any maturity date.
  • Closed ended Scheme: Closed -ended mutual fund schemes are available with a fixed maturity date.

Different Schemes Offered by Mutual Funds by investment objective are as Follows:

Basically, there are four types of mutual funds Schemes in this category:

  • Equity / Stock Scheme:  These are also called as Growth Funds and investment of money is done in the equity market.
  • Fixed-income/ Bond Scheme:  Under this mutual fund scheme, investment of money is done in government and corporate bonds to provide a secure income. This is the least risky mutual fund scheme.
  • Money market Scheme: It is a mutual fund scheme in which investment is done in short term debt instruments issued by government, corporate etc.
  • Hybrid Scheme:  It is a mutual fund scheme in which investment is done in combination of different types of securities such as equity, debt, money market instruments etc.

Other Types of Mutual Fund Schemes are as Follows

  • Tax savings schemes: It is an Equity/ Stock funds scheme along with tax benefits and has a lock in period of three years.
  • Sector funds: Under this category your money is invested in the companies of a specific sector such as Banking, Steel industry etc.
  • Index Funds: Under this category your money is invested in different indices such as the SENSEX-30 (Benchmark index of BSE), NIFTY-50 (Benchmark index of NSE), and SX-40 (Benchmark index of MCX-SX) etc. and fund follows the performance of these indices.