WHAT IS MUTUAL FUND? HOW MANY TYPES ARE THERE?
There are several types of Mutual Funds: Sector-based: These invest only in a particular sector Eg. IT, Telecom, Petrochemical, etc Index-based: These invest only in the Index i.e. BSE Sensex, NSE Sensex. Their valuation is based on the value of the Index and not directly on any particular share. Growth-fund:They generally invest in equity across sectors and try to maximise their gain wherever possible. Mid-cap/ Small-cap Fund: They invest only in mid-cap or small-cap companies. Though the returns can be very high, so are the risks. Balance Fund: They invest both in debt and equity so as to provide good growth through equity and safety but low returns through debt.
