23/07/2025
Mutual funds are investment vehicles that pool money from multiple investors to invest in a diversified portfolio of securities. They are broadly categorized based on their structure, asset class, investment objectives, and risk profile.
Here are the main types of mutual funds:
🔹 1. Based on Asset Class
a. Equity Mutual Funds
Invest primarily in stocks (equities)
Aim for high returns over the long term
Higher risk, suitable for long-term wealth creation
Examples: Large Cap Fund, Mid Cap Fund, Small Cap Fund, ELSS (tax-saving fund)
b. Debt Mutual Funds
Invest in fixed-income instruments like bonds, treasury bills, and debentures
Lower risk, steady returns
Suitable for conservative investors or short-term goals
Types: Liquid Funds, Short-Term Debt Funds, Gilt Funds, Corporate Bond Funds
c. Hybrid Mutual Funds
Invest in a mix of equity and debt
Balance between risk and return
Examples: Aggressive Hybrid Fund, Conservative Hybrid Fund, Balanced Advantage Fund
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🔹 2. Based on Structure
a. Open-Ended Funds
Can be bought or sold anytime
No fixed maturity date
Highly liquid
b. Close-Ended Funds
Have a fixed maturity period (e.g., 3–5 years)
Can be purchased only during the New Fund Offer (NFO) period
Traded on stock exchanges
c. Interval Funds
Combination of open and close-ended
Available for purchase/redemption only during specific intervals
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🔹 3. Based on Investment Objective
a. Growth Funds
Aim for capital appreciation
Invest mainly in equities
Suitable for long-term investors
b. Income Funds
Focus on providing regular income
Invest in debt instruments
c. Tax-Saving Funds (ELSS)
Equity-Linked Savings Scheme
Offers tax deduction under Section 80C (up to ₹1.5 lakh)
3-year lock-in period
d. Liquid Funds
Invest in short-term debt instruments (maturity
