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Whether you are beginning to invest in mutual funds or looking to diversify your investment portfolio. Mutual funds, managed by fund managers ensures that your investments grow steadily and beat inflation. In this article we will cover the different types of mutual fund options investors have to make smarter investments.
Mutual funds in India are classified into various categories, based on the guidelines introduced by SEBI in October 2017 for scheme categorization and rationalization. Investors can select from these options depending on their financial objectives.
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These are grouped according to the kind of assets they invest in such as equity, debt, or a mix of both.
These Mutual Fund (MF) types are designed to help investors achieve specific financial objectives like capital growth or income generation.
These are defined by how investors can enter and exit the fund, such as anytime, within a fixed period, or at intervals.
These are classified by the level of risk involved, ranging from very low to high.
These types of mutual funds focus on specific sectors, strategies, or geographies to meet unique investment preferences.
Fund Type
Description
Sector Funds
Invest in a specific sector like technology, pharma, or banking.
Index Funds
Track and replicate the performance of a specific stock market index like Nifty 50 or Sensex.
Funds of Funds
Invest in a portfolio of other mutual funds rather than directly in securities.
Emerging Market Funds
Focus on equities or bonds in developing markets with high growth potential.
International or Foreign Funds
Invest primarily in assets located outside the investor’s home country.
Global Funds
Invest in companies across the world, including the investor’s home country.
Real Estate Funds
Invest in listed real estate companies or real estate investment trusts (REITs).
Commodity-focused Stock Funds
Target companies engaged in commodities like oil, metals, or agriculture.
Market Neutral Funds
Aim to deliver consistent returns by hedging long and short positions, regardless of market movement.
Inverse or Leveraged Funds
Designed for short-term strategies to magnify gains or losses, often using derivatives.
Asset Allocation Funds
Adjust asset allocation between equity, debt, and others based on market trends.
Gift Funds
Enable investors to invest on behalf of others, often used for gifting financial products.
Exchange-Traded Funds (ETFs)
Mutual fund units traded like stocks on exchanges, usually tracking an index or asset class.
These types of mutual funds are designed to meet specific life goals such as retirement planning or securing a child’s future.
Mutual funds in India offer diverse options to suit various goals, risk levels, and investment preferences. By investing these Mutual Fund (MF) types, you can build a portfolio and your personal wealth that fits your financial aspirations. For tailored wealth management and exclusive investment opportunities, explore DBS Treasures today.
And if you are an NRI looking to complement your mutual fund portfolio with seamless global banking, opening an NRI Savings Account can provide you with added convenience, flexibility, and exclusive benefits.
Disclaimer: The information provided is for informational purposes only and should not be construed as financial advice. Please consult with a financial advisor before making any investment decisions.
