Types of Mutual Funds in India Archives - Newskart https://www.newskart.com/tag/types-of-mutual-funds-in-india/ Stories on Business, Technology, Startups, Funding, Career & Jobs Sun, 10 Mar 2024 12:48:56 +0000 en-US hourly 1 https://www.newskart.com/wp-content/uploads/2018/05/cropped-favicon-256-32x32.png Types of Mutual Funds in India Archives - Newskart https://www.newskart.com/tag/types-of-mutual-funds-in-india/ 32 32 157239825 Exploring the Diverse World of Mutual Funds in India https://www.newskart.com/exploring-the-diverse-world-of-mutual-funds-in-india/ Sun, 10 Mar 2024 12:48:56 +0000 https://www.newskart.com/?p=108072 Exploring the Diverse World of Mutual Funds in India
Exploring the Diverse World of Mutual Funds in India

In India, mutual funds have gained popularity as an investment option because of their professional management, flexibility, and diversity. It’s essential for investors seeking to grow their wealth then he needs to understand the range of mutual fund options available in the Indian market. I’ll look at the types of mutual fund categories in this article that suit a range of risk tolerances and financial objectives.

  1. Equity Mutual Funds
    High-yielding stock investments are the main focus of equity mutual funds. Investors with a longer time horizon and a higher risk tolerance should consider these funds. Market capitalization can be used to further divide them into groups like large-cap, mid-cap, and small-cap funds.
  2. Debt Mutual Funds
    Debt mutual funds make investments in money market instruments, corporate and government bonds, and other fixed-income assets. These funds are appropriate for investors looking for stability and consistent income because they are thought to carry less risk than equities funds.
  3. Hybrid Mutual Funds
    Hybrid mutual funds, also referred to as balanced funds, make investments in a combination of debt and equity assets. With a goal of providing both income and capital appreciation, these funds offer a well-rounded strategy. Investors with a moderate tolerance for risk can consider them appropriate.
  4. Index Mutual Funds
    An index fund, like the Nifty or Sensex, tracks a particular market index. The performance of the index with which these funds are linked is intended to be replicated. For investors looking for a wide market exposure, index mutual funds are a great option because of their reduced fee ratios.
  5. Sectoral and Thematic Funds
    While thematic funds invest in subjects like infrastructure or consumption, sectoral funds concentrate on particular areas like technology, healthcare, or banking. With the use of these funds, investors can match particular trends or industries with their portfolios.
  6. ELSS (Equity Linked Saving Scheme)
    A kind of equity mutual fund having a three-year lock-in term is called an ELSS fund. They are a well-liked option for investments that save taxes since they provide tax advantages under Section 80C of the Income Tax Act.
  7. Liquid Mutual Funds
    Liquid funds offer capital safety and liquidity through their investments in short-term money market products. These funds offer an alternative to typical savings accounts and are appropriate for investors with a short investment horizon.
  8. Gilt Mutual Funds
    Government securities are the main asset class for gilt funds, which carry less credit risk. For prudent individuals seeking a safe investing option, these funds are excellent.
  9. Fund of Funds (FoF)
    Investing in other mutual funds instead of individual equities is what Fund of Funds does. These funds are appropriate for investors seeking a well-managed, diversified portfolio since they offer diversification across many fund types.
  10. Gold Mutual Funds
    Gold funds make investments in assets linked to gold or in actual gold. They make it possible for investors to invest in gold without requiring actual storage. An appealing choice for investors wishing to diversify their holdings is gold mutual funds.

Conclusion

A wide range of investor preferences and financial objectives are satisfied by the diversity of mutual funds that are offered in India. It’s important to evaluate your financial goals, investment horizon, and risk tolerance before making any investments. Speaking with a financial advisor can also assist you in making well-informed choices and building a portfolio that is balanced and meets your specific goals.

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Mutual Fund Investment-A Direct Plan Vs Regular Plan https://www.newskart.com/mutual-fund-investment-direct-plan-regular-plan/ Tue, 02 Oct 2018 12:34:25 +0000 http://sh048.global.temp.domains/~newskar2/?p=89377 Mutual Fund Investment-A Direct Plan Vs Regular Plan
Mutual Fund Investment-A Direct Plan Vs Regular Plan

A mutual fund (MF) is an investment tool funded by shareholders that trades in diversified holdings. It is a professionally managed investment fund that pools money from many investors to purchase securities and in return it charges a small fee to manage the money.

These investors may be retail or institutional in nature. Mutual funds have advantages and disadvantages compared to direct investing in individual securities.

Mutual funds are an ideal investment vehicle for regular investors who do not know much about investing. Investors can choose any mutual fund scheme and can invest on them based upon their goals.

Direct Plan Vs Regular Plan of Mutual Funds

Almost all mutual fund schemes come with two plans – direct and regular. Effective 1 January 2013, all asset management companies (AMCs) launched direct mutual fund plans for all open-ended schemes. Before 2013, only the regular plans were available.

A regular plan for mutual fund is meant for those who invest in a fund through their distributors. These plans, therefore, come embedded with distributor commission that gets deducted from your fund’s valuation before arriving at its net asset value (NAV).

There are many investors who wanted to invest on their own, so SEBI (Securities and Exchange Board of India) intervened in the matter and asked all the fund houses to come out with direct plans. The direct plan bypassed distributor commission and also its expenses are lower than those of the regular plan.

How to invest in Direct Plans?

Investor can go to every fund house’s website, can create account to register there and can invest in the direct funds. Other way is to go to Mutual Funds Utility, the mutual fund industry’s platform to invest across schemes, after opening an account there. There are various portals available which offer direct plans to invest in which may charge a flat fee.

Types of Mutual Funds in India

As per SEBI, there are 4 types of mutual funds available in India-

1. Equity mutual fund

Such type of category invests directly in stocks which can give returns based on the Stock market performance.

2. Debt mutual fund

Such schemes invest money in debt securities which are safer than the equity mutual funds and provide moderate returns.

3. Hybrid mutual fund

Under this category, money is invested in a mix of equity and debt.

4. Solution-oriented mutual fund

With a mandatory lock in period of five years, money is invested for particular solutions or goals like retirement and child’s education.

Must Read Conclusion on Direct plan vs Regular plan

Since there is advantage that you can save a lot of commission or other charges in direct investment plans of mutual fund and can get sizable return over a period of time but biggest drawback of this method is that you will have to complete the formalities, do the research of mutual funds, monitor your investment all by yourself. It is good investment option if you know all above ups and downs of the market.

Through direct plan, you would not be able to get the recommendations provided by the experts since market is full of mutual fund investment plans and it becomes very crucial to decide by yourself in term of direct plan vs regular plan whereas in regular plan on mutual fund investment, you would be able to get expert insight on any fund.

Investment service is another consideration where your advisor will provide services either quarterly or half yearly and also will review your investment periodically in regular plan whereas it is not possible in direct plan vs regular plan.

So, in all if you have sound knowledge about your portfolio and can manage it in all ups and downs then direct plan is good other go with regular plan.

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