Types of Mutual Funds in India

Types of Mutual Funds in India

Mutual funds in India are classified based on structure, asset class, investment goals, and risk level. Let’s break them down one by one:

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1. Based on Structure

✅ Open-Ended Funds

• You can buy or sell units anytime.
• No maturity period.
• Ideal for long-term goals and flexibility.

🔒 Close-Ended Funds

• Invest only during the New Fund Offer (NFO) period.
• Locked for a specific duration (e.g., 3–5 years).
• Listed on stock exchanges after the NFO.

🔄 Interval Funds

• Combination of open and close-ended funds.
• Purchase/redemption allowed at specific intervals.

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2. Based on Asset Class

📈 Equity Mutual Funds

• Invest primarily in stocks.
• Higher returns, higher risk.
• Suitable for long-term wealth creation.

Types include:

• Large Cap, Mid Cap, Small Cap
• ELSS (Tax-saving)
• Sectoral/Thematic Funds

💰 Debt Mutual Funds

• Invest in government securities, bonds, debentures.
• Lower risk, stable returns.
• Ideal for short to medium-term goals.

Types include:

• Liquid Funds, Corporate Bond Funds, Gilt Funds, Dynamic Bond Funds

⚖️ Hybrid Mutual Funds

• Invest in both equity and debt.
• Balanced risk and return.
• Great for moderate-risk investors.

Types include:

• Aggressive Hybrid Fund, Conservative Hybrid Fund, Dynamic Asset Allocation Fund

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3. Based on Investment Goals

🎯 Growth Funds

• Focus on capital appreciation.
• Suitable for long-term investors.

💵 Income Funds

• Focus on generating regular income.
• Ideal for retirees or conservative investors.

🛡️ Tax-Saving Funds (ELSS)

• Equity-Linked Saving Scheme (ELSS).
• 3-year lock-in with tax deduction up to ₹1.5 lakh under Section 80C.

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4. Based on Risk Profile

• Low Risk: Liquid Funds, Ultra Short-Term Debt Funds
• Moderate Risk: Hybrid Funds, Corporate Bond Funds
• High Risk: Small Cap Equity Funds, Sectoral Funds

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Conclusion

Choosing the right mutual fund depends on your goal, time horizon, and risk appetite. Whether you’re saving for retirement, a new home, or building wealth, there’s a fund type tailored for you.

Want help picking the right one? Reach out for a personalized plan. Open Account with us