Mutual Funds are for those who are on the lookout for investing in options that can allow for a reasonable amount of monetary return without endangering their finances too much. This is what has partly fuelled the entire focus towards mutual funds in India. Structured investments where the money is spread wide to decrease the risk of loss, mutual funds vary based on either the accessibility to new investors or the amount of capital that it asks for an investor to pledge into it. So the variants can be as follows:
1) Open-ended or closed-ended (based on whether new investors can be added continuously or not)
2) Small-cap, mid-cap or large-cap (determined through the size of one’s corpus)
There is a wide array of types of Mutual Funds in India to look at, but let’s understand the four main ones viz. Equity or Growth Funds, Debt or Fixed Income Funds, Liquid Funds or Money Market Funds and Hybrid or Balanced Funds.
Equity Funds invest in equity shares. They are high risk funds as the returns you get are in direct correlation to the stock markets. These funds are ideal for those who desire growth in the long term.
Debt Funds invest in fixed income securities like government securities, treasury bills, debentures, corporate bonds, commercial papers and other money market instruments. These funds have low risk as compared to equity funds and are well suited for medium and long term investor seeking regular and steady income growth.
Liquid Funds invest in liquid money market instruments. The investment period could be as short as a day thus making it easy to liquidate your investments. These are ideal for short term investors and corporate workers looking to invest for a short period.
Hybrid Funds invest in both equity and debt instruments, thus giving you the benefit of both equity and debt funds i.e. investment growth and steady income. These are well suited for medium and long term investors who are willing to take moderate risks.
Equity Funds invest in equity shares. They are high risk funds as the returns you get are in direct correlation to the stock markets. These funds are ideal for those who desire growth in the long term.
Debt Funds invest in fixed income securities like government securities, treasury bills, debentures, corporate bonds, commercial papers and other money market instruments. These funds have low risk as compared to equity funds and are well suited for medium and long term investor seeking regular and steady income growth.
Liquid Funds invest in liquid money market instruments. The investment period could be as short as a day thus making it easy to liquidate your investments. These are ideal for short term investors and corporate workers looking to invest for a short period.
Hybrid Funds invest in both equity and debt instruments, thus giving you the benefit of both equity and debt funds i.e. investment growth and steady income. These are well suited for medium and long term investors who are willing to take moderate risks.
No comments:
Post a Comment