These are the funds which are available to buy and sell throughout the year with no restrictions on withdrawals. Anyone can invest or withdraw fund units anytime.
2. Close Ended Funds
These are the funds which can be purchased only during the initial period. There is a fixed maturity period for these type or funds. This means no new investor can get in nither get out.
3. Interval Funds
These are the mutual funds which have the qualities of both open ended and close ended funds and can be bought at intervals during fund offer period.
Types Of Mutual Funds Based On Structure
1. Equity Growth Funds
These are the mutual funds that invests in equity shares of the stock market. These are comparatively high risks funds with high returns. Besed on market capitalism they can be large cap, mid cap or small cap.
2. Debt / income Finds
These are the mutual funds that invests in government bonds or invests in fixed income assets to generate fixed or stable returns. They are comparatively low risk funds.
3. Money Market / Liquid Funds
These are the mutual funds which invests in assets which maturity is around 91 days offering a good returns higher then bank FD. Best for parking money for a short period.
4. Balanced Or Hybrid Funds
These are the mutual funds which invests upto 60% in equity and rest 40% in debt instruments. These are low risk funds compared to equity funds.
5. Tax saving funds
These are the mutual funds which invests in equity and they are eligible for a tax deduction upto 1.5 lakh as per second 80C of income tax act with a lock in period of 3 years.
6. Sector Mutual funds
These are the mutual funds which invests in a particular sector like telecom, infrastructure, inport and export, banking etc. These are comparatively high risk but returns will be based on the performance of the sector.
Multi Cap Mutual Funds :
Multi cap mutual funds are diversified funds which invests in all types of equity assed using small fund management and allocation of assets in a manner that it compromises all above types of mutual funds.
Mutual Funds Based On Risks
1. Low Risk Mutual Funds
These are the mutual funds consists mainly debt investments and for people who are happy with avarage returns and do not want to take risk at all.
2. Medium Risk Mutual Funds
These mutual funds mainly invests in both equity and debt instruments, but equity is higer as 60:40 ratio. These are medium risk funds with good returns and for people who want to take some risks.
3. High Risk Mutual Funds
These are the mutual funds that mainly invests in equity assets and said to be high risk funds but offers outstanding returns upto 50% a year. For investor who loves to take risks because risk hai to isk hai 😍