Types of Mutual Fund – It is important for an investor to understand that Mutual Fund (Company), and Mutual Fund Scheme (Mutual Fund Offer) both are different,
Today there are about 50 mutual fund houses (companies) working in India, and all mutual fund companies have many different types of mutual fund schemes,
And in this way many types of Mutual Funds and their offers are available in the market,
For a better understanding of mutual fund investment, in today’s topic, we will try to understand the different types of mutual funds and their categories, so that we can earn better profits from our mutual funds.
Which type of mutual fund is right?
After understanding the many advantages of mutual funds, one thing becomes clear, investing in mutual funds is the right option, but the main question is which mutual fund is right for whom?
There are thousands of mutual fund schemes available in the market today, in such a situation the biggest dilemma for a common investor is which mutual fund offer to invest in?
Is it right to invest in any mutual fund offer?
No way,
If it was correct to invest in any mutual fund, then there would not have been many different offers of different types of mutual funds in the market today, there would have been only one offer,
But the mutual fund company knows that – each one of us invests with different objectives and financial goals in mind, so a single mutual fund offer may not satisfy all of us,
Therefore, keeping in mind the different needs of all of us, all mutual fund companies make many different mutual fund schemes,
Different categories of mutual funds
Whenever a mutual fund company brings a new offer, it is not for any one person, the mutual fund company creates new mutual fund schemes keeping in mind the needs of groups of people,
Like – People who want to invest by saving tax money – TAX SAVING INVESTMENT scheme like – ELSS
And in the same way new mutual funds are created according to the needs of different groups of people.
If we talk about mutual fund category, then some major categories are as follows –
- MATURITY TIME PERIOD
- INVESTMENT IN ASSET CLASS
- REINVESTMENT
- TAX SAVING
- SHORT TERM
- LONG TERM
- DIFFERENT OBJECTIVES
- DIFFERENT SECTOR FUND
In this way, according to the OBJECTIVE of the mutual fund, there can be many different types of mutual funds, and according to their characteristics and similarities, their different categories can also be made.
If a general thing is to be said, then only two categories of mutual funds can be made –
- STRUCTURE OF MUTUAL FUND (According to the structure of mutual fund)
- OBJECTIVE OF MUTUAL FUND
And mutual funds can be kept by making many different SUB categories of these two,
TYPES OF MUTUAL FUND
Now if we talk about the types of mutual funds, then Mutual Funds can be of many types within different categories,
What type of Mutual Fund is it, it is entirely determined by this, what is the benefit of that Mutual Fund, what is the objective of that Mutual Fund, and in which category that Mutual Fund comes.
| MUTUAL FUND CATEGORIES | TYPES OF MUTUAL FUND |
| Maturity period/Structure of Mutual Fund | OPEN ENDED MUTUAL FUND,
CLOSE ENDED MUTUAL FUND, EXCHANGE TRADED FUNDS, |
| Re-Investment and Income | GROWTH FUNDS,
DIVIDEND FUNDS, DIVIDEND REINVESTMENT FUNDS, |
| ASSET CLASS | EQUITY FUNDS
DEBT FUNDS
|
| Charges On Funds | LOAD FUND
NO- LOAN FUND |
| Different Objective Funds | HYBRID OR BALANCED FUND
SECTOR FUND INDEX FUND TAX SAVING FUND FUNDS OF FUNDS |
| Liquidity of Funds | MONEY MARKET FUNDS
LIQUID FUNDS |
Next we will try to understand all these categories of MUTUAL FUND separately in some detail,
The thing to note is that the mutual fund which is right for me, it is not necessary that the same mutual fund is right for you too, it happens because we all have different economic circumstances,
You have to choose the mutual fund offer keeping in mind your financial condition, risk appetite, investment tenure, and investment goals.
And in the same way, before investing in any mutual fund, you have to invest by choosing a better mutual fund offer keeping in mind your own investment goals,
“If you invest in any mutual fund without thinking, then it might turn out to be a wrong investment for you,”
Therefore, before investing in mutual funds, you have to understand the different types of offers offered by mutual funds,
A mutual fund company keeps bringing hundreds of mutual fund offers, in such a situation it is necessary to understand its objective before investing.
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