Types of mutual funds from "summary" of Let's Talk Mutual Funds by Monika Halan
Mutual funds are a pool of money collected from a large number of investors with a common investment objective. These funds are managed by professional managers who invest the money in various asset classes such as stocks, bonds, and other securities. Mutual funds are classified into different types based on their investment objective, structure, and asset allocation. One of the most common types of mutual funds is equity funds. These funds primarily invest in stocks of companies listed on the stock exchanges. Equity funds are suitable for investors looking for long-term capital appreciation. They can be further classified into large-cap, mid-cap, and small-cap funds based on the market capitalization of the companies they invest in. Another type of mutual fund is debt funds. These funds invest in fixed-income securities such as government bonds, corporate bonds, and money market instruments. Debt funds are suitable for investors looking for regular income and capital preservation. They are less risky compared to equity funds but offer lower returns. Hybrid funds, also known as balanced funds, invest in a mix of equity and debt instruments. These funds provide investors with a diversified portfolio that offers the potential for capital apprecia...
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