Mutual Fund Investment Categories and Plans

Mutual Fund Investment Categories and Plans

Mutual fund companies introduce different schemes. Many categories are present in funds.

Different Fund Categories:

  • Equity, Debt, Hybrid, Balanced and Liquid are the major categories. Generally mutual fund investing is risky. Since market position is not stable always, there is lot of risk involved in it.
  • Among all the categories, equity funds are the risky ones. On the other side, they have high returns. Equity schemes have many sub categories. Diversified Equity, Large Cap, Equity connected Saving schemes, Sectoral and Index and Exchange Traded are some of them.
  • Debt schemes are less risky. Debt schemes are invested in government organisations and corporate. As the risk is less in these plans, returns are also less.
  • Balanced plan is the combination of debt and equity. From the name, it is understood that everything about this plan is balanced. The risks in addition as returns are good in these balanced plans.

Investment Plans:

As there is more competition, more number of plans is being introduced. At present, various techniques like SIP and VIP are brought in practice. methodic investment plan was introduced to target middle class people and rural people. The total investment is allowed to be paid as equal monthly installments in SIP. Volatile markets need techniques like value investment plan. Certain schemes are economical and have functional usage. Some of them are listed here below.

  • Magnum Tax gain was introduced by SBI. It has tax exemption facilities. Tax exemption is allowed below 1 lakh amount here.
  • Chota SIP was also introduced by SBI. Monthly installments are only in range of 100 to 500 here.

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