What are the types of mutual funds?

What are the types of mutual funds?

What are the types of mutual funds? Over the last few years, mutual funds have become very popular as a means of investment. People are realizing that mutual funds are a very effective means of achieving financial goals and building prosperity. There are different types of mutual funds available depending on the investment targets and the nature of the risk involved. This article will provide popular mutual funds. 

types of mutual funds

What are the types of mutual funds?

 1. Equity Fund

 An equity fund invests in the company's stock or equity. Funds can be classified as different funds or sector-specific. Various equity funds invest in stocks throughout the stock market, while sector-specific equity funds invest in stocks of companies within a particular industry.

 2. Debt Fund

 Debt mutual funds invest in fixed-income securities, such as corporate bonds, government bonds and other types of money market assets. They are also known as bond funds or fixed income funds.

 3. Money Market Fund

 Money market funds invest in short-term, cash and cash equivalent assets that are rated with good quality securities. As a result, money market funds are considered a low risk or non-risk safe investment. This fund provides consistent risk-free returns.

4. Index Fund

 The fund that monitors the success of the index is known as the index fund. The fund is indirectly managed, and seeks to mimic the holding and performance of the indices under it.

 5. Balanced Fund

 A balanced mutual fund has a bond element and an equity element in a portfolio in a predetermined ratio. This custom-built portfolio helps investors diversify their investments by incorporating them into different asset groups, such as stocks and bonds.

 6. Income Fund

 An income fund is a type of debt fund that invests in government and corporate bonds and money market securities. The strategy is to keep pace with the pace of interest rates in the bond market. They have investment quality and high lending position, which guarantees capital retention. This fund guarantees higher interest rates on investments by focusing on better yielding bonds.

 7. Fund of funds

 A "fund of funds" is a mutual fund investment strategy that involves maintaining a portfolio of any other investment fund rather than actively investing in equities, bonds or other assets.

 8. Special Fund

 Special funds are those that focus on a specific industry, region or region.


 Mutual funds have become a favorite of investors, thanks to the many benefits. However, it is also important for investors to understand their investment options. The best way to get started is by investing in any of the popular mutual fund types mentioned in this article.

(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. www.Tradtips.com suggests its readers to consult with their investment advisers before making any financial decision.)

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