Type of Mutual Funds

Based on Asset class:

1) Equity Fund: If you are investing in equity growth funds, then you are largely putting your money in stocks. The main objective of these funds is to achieve long-term capital growth. These funds may invest in a wide range of industries/sectors or focus on one or more sectors.

2) Debt Fund: Debt funds are mutual funds which usually invest in the government securities, corporate bonds etc. Debt funds are more stable and less volatile to the market conditions.

3) Balanced Fund: Balanced mutual funds invest in both equities and fixed income instruments. These funds generally tend to invest in the government securities, corporate bonds etc.

4) Money Market Fund: A money market refers to the mutual funds that are highly liquid and where the money is invested in short-term investments like deposits certificates, treasury bills etc. You can have your money invested in money market funds for duration like a day.

5) Liquid Funds: The money gets invested in short-term financial instruments like treasury bills, deposit certificates for the purpose of providing ease of taking out money anytime. Liquid funds are considered to be low risk with average returns and are ideal for people looking for short- term investment.