Mutual Funds And Its Types That You Should Know

Mutual funds provide a pool of money for investors to purchase a diversified portfolio of securities. Professional Portfolio managers attempt to produce capital gains or income for the fund's investors. There are three types of mutual funds- asset class, investment goals, and structure-based. 

Mutual funds are divided into three types- asset class, investment goals, and structure-based. Let's look into each category of mutual funds to gain insights and discover intriguing facts. 

Equity funds are a type of asset class that invests in shares of companies. For example, large-cap Equity Funds target well-established, large companies, while small-cap funds focus on smaller, high-growth businesses. 

Debt funds are an asset class in which bonds provide investors with a steady income. This includes Government Bond Funds and Corporate Bond Funds.  

Money Market Funds invest in low-risk, short-term securities, such as treasury bills and commercial papers. It is a type of asset-class mutual fund.  

Growth funds are an investment goal type of mutual fund that primarily invests in stocks of companies with high growth potential. It is suited for long-term investors seeking returns.  

Income Funds emphasise regular income generation by investing in bonds, fixed-income or dividend-yielding stocks. It is a type of Investment goal-based mutual fund.  

A type of investment-based mutual fund that prioritises Liquidity and safety. It is ideal for investors seeking quick access to funds with minimal risks.  

Open-ended funds provide structure to mutual funds to buy and sell units continuously. These funds are suitable for easy entry and exit points and are commonly used for long-term wealth creation.  

Closed-ended funds are a type of structure of mutual funds that have a fixed maturity period and a limited number of units. These funds can be used for long-term investments and stock exchanges.  

The internal feature combines open and closed-ended mutual funds suited for investors seeking liquidity and long-term investments. It is a type of structured mutual fund.