A mutual fund services provider enables the pooling of money from several investors so that the capital pool can then be invested in various securities such as stocks, bonds, and short-term debt. It is a trust that collects money from a number of investors who share a common investment objective .
The holdings of a mutual fund are known as the fund’s portfolio. Investors invest in the securities included in the portfolio instead of buying shares directly on the stock market.
Every fund has a fund manager(s), a research analyst and / or an investment team who identify the financial instruments that will generate returns. As an investor, you have to look at the securities in the fund’s portfolio, track the portfolio, and check whether your risk appetite aligns with the risk taken by the Mutual Fund Scheme. Although the fund manager handles most of the performance analysis, it is important for you to study the performance of the portfolio asset classes along with understanding the level of risk to your principal amount.
Below are the types of mutual funds. Besides this list, mutual funds are also classified according to organization structure, type of securities in the portfolio, solution-oriented approaches (viz tax savings) etc.
As stated earlier, you as an investor will benefit from your own independent study of the fund manager’s proclivity and strategies. It is important to select mutual funds that align with your larger financial goals of investing.
In this type of fund, the fund manager plays an active role in taking the Buy / Hold / Sell decisions and in the stock selection. Strategies undertaken by the fund manager for curating the portfolio are declared upfront in the scheme’s offer document, as the risks and returns depend on this strategy, and are hence a decision point for investors.
The securities in the holdings of passive funds just mirror a stated index or benchmark. Index funds and Exchange Traded Funds are two primary examples of the passive fund. Fund managers of passive funds can take a backseat in fund portfolio curation since buy / hold / sell decisions mimic the benchmark index.
These are funds that provide capital appreciation over time. For this, growth funds typically invest in growth-oriented securities such as equities. To enjoy capital appreciation, investors have to be willing to invest in the growth fund for medium to long-term investment horizon. Since equities are the major investment avenue for growth funds, there is a lot of volatility in the short-term.
These mutual funds are designed to generate returns on a regular basis, which provide a steady income to investors. So as to minimize volatility, income funds typically invest in fixed income securities such as corporate bonds, debentures, and Government securities.
These funds offer liquidity and principal protection. Investors generally invest in these funds for the short-term investment horizon. Instruments for this type of fund include commercial paper, commercial bills, treasury bills, and other securities specified by the RBI from time to time having maturities not exceeding 91 days.
Empowering you to grab investment opportunities for your long-term goals with sustainable risk.
Learn MoreAvoid market fluctuations by considering debt-oriented mutual fund schemes.
Learn MoreMaking it easy for you to invest in precious metals at affordable costs in Gold / Silver Mutual funds.
Learn MoreAdding global diversification to your portfolio through stocks of companies listed outside India.
Learn MoreHelping our esteemed customers to choose from a wide array of PMS Strategies offered by Mutual Funds
Learn MoreHelping our esteemed customers to choose from a wide array of AIF Strategies offered by Mutual Funds
Learn MorePickle-Jar Investments Private Limited (CIN. U67100PN2021PTC201233) is a NISM Certified / AMFI Registered Mutual Fund Distributor registered with the Association of Mutual Funds in India (AMFI), holding ARN No. 184140. We are not Registered Investment Advisors (RIA) as defined by the SEBI (Investment Advisers) Regulations, 2013 and do not provide investment advice on any SEBI regulated products. We do not charge any fees to our clients. We receive remuneration by way of commission / Brokerage from the Mutual Funds/ Asset Management Companies.
Mutual Funds investments are subject to market risks. Please read all Scheme related documents carefully before investing. Past performance of schemes may or may not be sustained in future. We advise investors to read data and risk factors of various mutual fund schemes available in the Scheme Information Document (SID), Statement of Additional Information (SAI), Key Information Memorandum (KIM) etc.