There are multiple types of mutual funds available across
the board; it can be classified according to the instruments in which they
invest, risk profile, region, Industry etc. The broad classification be done as
below -
·
Equity Funds
o
Large Cap
o
Mid Cap
o
Theme based funds
o
Diversified Equities
·
Debt Funds
o
Gilt Funds
o
Income Funds
o
Dynamic funds
·
Balanced or Mixed funds
Equity Funds –
These funds invest in share market and take position as per the fund’s manager view
and the category in which fund belongs. Mid cap funds will usually take
position in mid cap stocks where they expect high returns.
Debt Funds – They
invest in Fixed Income securities, It can be GOI securities or corporate bonds
etc. Dynamic funds try to make money by betting on interest rate cycle using
duration as a tool
Balanced Funds –
There are funds who try to best of both the worlds and have money allocated to
both fixed income as well as equities
