Mutual Funds & Types of Mutual Funds Products

What are Mutual Funds?

Mutual funds are funds that pool the money of several investors to invest in equity or debt markets. Mutual funds are popular among the public because they offer the ability to invest in more complex financial markets with the advantage of diversification, professional management and liquidity. Relationship manager helps you to execute your Mutual Fund investment in which you want to Invest. The Mutual Fund sector is a regulated sector. If any sector is regulated then the concern of investor is safe in it.

Types of Mutual Funds (Open Ended Funds & Closed Ended Funds)

Open Ended Funds

  • Initial Issue for a limited period
  • Continuous sale and repurchase
  • Size of the fund changes as investor enter and exit.
  • NAV- Based pricing

Closed Ended funds

  • Sale of units by fund house during NFO only
  • Listing on exchange for liquidity
  • Size of fund is kept constant
  • Price in the market is usually at a discount

Types of Mutual Funds Products on the basis of Investment Objective, Investment Prospect & Risk

  • Equity Funds: Pre- dominantly invest in equity Market .It require a long investment prospect and suit growth objective.
  • Debt Funds: Pre- dominantly invest in debt Market. It suits for the income objective.
  • Balanced Funds: Invested in debt and equity in comparable proportions. Risk factor is less in it.
  • Liquid Funds: High level of liquidity, through a portfolio mix comprising of money market and debt instruments. This is least risky and for short term liquidity needs