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Mutual Fund and Its Different Types

A mutual fund is basically an investment scheme that is run by an asset management company, which brings together a group of people and invests their money in bonds, stocks, and other securities. Know more.

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Mutual Fund and Its Different Types

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  1. MUTUAL FUND AND ITS DIFFERENT TYPES

  2. WHAT IS MUTUAL FUNDS? A mutual fund is basically an investment scheme that is run by an asset management company, which brings together a group of people and invests their money in bonds, stocks, and other securities. In simple terms, it’s an investment vehicle made up of a pool of capital collected from several investors for the purpose of investing in securities like bonds, stocks, money market instruments as well as other assets.

  3. • Flowchart showing how mutual funds work –

  4. TYPES OF MUTUAL FUNDS There are several different types of mutual funds categorized on the basis of asset class, structure, and investment objectives. In fact, different types of mutual funds exist to cater to different needs of different people. Some of the best mutual funds are – • Income funds • Balanced funds • Equity funds • International/global funds • Hybrid funds

  5. INCOME FUNDS As the name suggests, these funds are meant to provide current income on a steady basis. These funds primarily invest in government and high-quality corporate debt. In simple terms, the primary objective of these funds is to provide a steady cash flow to investors. Moreover, the audience for these types of funds consists of retirees and conservative investors

  6. BALANCED FUNDS The main objective of these types of funds is to provide a balanced mixture of income, safety, and capital appreciation. The strategy of balanced funds is basically to invest in a portfolio of both equities and fixed income. A typical weighting of balanced funds is 60% equity and 40% fixed income.

  7. EQUITY FUNDS Equity funds are the type of funds that invest primarily in stocks. They are the largest category of funds. Long-term capital growth is the investment objective of this class of funds. There are, although, several different types of equity funds because there are many different types of equities.

  8. INTERNATIONAL/GLOBAL FUNDS A foreign fund or international fund invests only in assets that are located outside your country. Global funds or international funds can invest anywhere around the world, including your home country.

  9. HYBRID FUNDS These funds invest in both equities and fixed income and therefore, offers the best of both, growth potential and income generation. Like for example, child plans, pension plans, conservative balanced funds, and monthly income plans, etc.

  10. THANK YOU

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