Mutual Funds – Types of Mutual Funds in INDIA

There are various types of Mutual Funds in INDIA. Since they provide avenue to invest into small amount, which in turn, when collected is invested into large number of companies, they are a popular mode of investment for people who have surplus money, but do not have the time to actively monitor the market.

A Mutual fund , broadly speaking collects money from investor and invest it into different securities like share, debentures, etc.

From the income they earn on these investment, the mutual fund retains a part of income with them, to meet there expenses, pay commissions to distributors and profit margins. While these are indicated as 0.5 to 1.8 % by the mutual funds, if you see how much they retain from your income, it could be anywhere between 10-20% of your income where they generate profits. Even in cases where you make loss, there fixed charges are deducted from your share of income, or even from the money you have invested.

There are various types of mutual funds in India . According to the new SEBI guidelines, the mutual funds are now categorized into the following : –

  1. Equity Schemes – 

    Such schemes have to invest certain  Minimum % of total assets into  equity & equity related instruments. 

  2. Debt Schemes – Such schemes have to invest certain  Minimum % of total assets into  prescribed debt and money market instruments.
  3. Hybrid Schemes – Such schemes invest certain   % of total assets into  equity and balance in  debt and money market instruments.
  4. Solution Oriented Schemes – They are intended to provide certain solutions to needs through investment, like retirement funds, Children’s funds.
  5. Other Schemes – Like schemes which invest in Index (instead of shares/debt) and Fund of Funds (Funds which invest only in Funds)

To know more about each of these schemes, click on the Link of each of the above schemes.

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