How are mutual funds classified based on their portfolios?
Portfolio classification of mutual funds is done on the following basis: • Growth Funds • Investment objective: Capital appreciation of equity shares • Investment avenue: Equity shares of companies with high growth potential • For eg. Morgan Stanley Growth Fund • Income Funds • Investment objective: Providing safety of investments and regular income • Investment avenue: Bonds, debentures and other debt related instruments as well as equity shares of companies with high dividend payouts. There are 2 aspects of income funds viz. low investment risk with constant income and high investment risk generating high income. • For eg. Templeton Income Fund • Balanced Funds • Investment objective: Modest risk of investment and reasonable rate of return • Investment avenue: Judicious mix of equity shares, preference shares as well as bonds, debentures and other debt related instruments. • For eg. GIC Balanced Fund • Money Market Mutual Funds (MMMFs) • Investment objective: To take advantage of the
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