WHAT ARE THE DIFFERENT TYPES OF MUTUAL FUNDS?
The mutual funds are categorized on the following basis: Maturity Period Open Ended Scheme – These schemes do not have fixed maturity period. Investors directly deal with investment company for redemptions and investments. Investors can buy and sell units at NAV at related price. Close Ended Scheme – These schemes have stipulated maturity period (ranging from 2 to 15 Yrs). Investors can invest in these schemes at the time of initial issue during the initial offering period and thereafter sell / buy the units of the scheme on the stock exchange where they are listed. Investment Objective Growth / Equity Oriented Scheme – The objective of these funds is to provide capital appreciation over the medium to long- term. Such schemes normally invest a major part of their funds in equities. Such funds have comparatively high risks. These schemes provide different options to the investors like dividend option, capital appreciation, etc. and the investors may choose an option depending on their p
(a) On the basis of Objective Equity Funds/ Growth Funds Funds that invest in equity shares are called equity funds. They carry the principal objective of capital appreciation of the investment over the medium to long-term. The returns in such funds are volatile since they are directly linked to the stock markets. They are best suited for investors who are seeking capital appreciation. There are different types of equity funds such as Diversified funds, Sector specific funds and Index based funds. Diversified funds These funds invest in companies spread across sectors. These funds are generally meant for risk-taking investors who are not bullish about any particular sector. Sector funds These funds invest primarily in equity shares of companies in a particular business sector or industry. These funds are targeted at investors who are extremely bullish about a particular sector. Index funds These funds invest in the same pattern as popular market indices like S&P 500 and BSE Index. The
As you probably know, Mutual Funds have become pretty popular over the last few years. What was once just another obscure financial instrument is now a part of our lives and here to stay. According to sources, more than 80 million people, or one half of the households in America, invest in Mutual Funds. That means that, in the United States alone, trillions (yes, with a ‘T’) of dollars are invested in Mutual Funds. It’s common knowledge that investing in mutual funds is (or at least should be) better than simply letting your cash waste away in a savings account, but, for most people, that’s where the understanding of funds ends. Originally Mutual Funds were meant to allow the common man to get a piece of the market considering that the common man would be less knowledgeable about financial markets and would have smaller investments to transact with. Instead of spending all your free time buried in the financial pages of the Economic Times, all you have to do is buy a mutual fund and yo
Ans. (a) On the basis of Objective • Equity Funds/ Growth Funds Funds that invest in equity shares are called equity funds. They carry the principal objective of capital appreciation of the investment over the medium to long-term. The returns in such funds are volatile since they are directly linked to the stock markets. They are best suited for investors who are seeking capital appreciation. There are different types of equity funds such as Diversified funds, Sector specific funds and Index based funds. • Diversified funds These funds invest in companies spread across sectors. These funds are generally meant for risk-taking investors who are not bullish about any particular sector. • Sector funds These funds invest primarily in equity shares of companies in a particular business sector or industry. These funds are targeted at investors who are extremely bullish about a particular sector. • Index funds These funds invest in the same pattern as popular market indices like S&P 500 and BS
