What are the types of Mutual Fund?

A. Equity Funds

1) These funds invest predominantly in shares of companies and hence the name

2) The primary objective is wealth creation or capital appreciation over long term

3) They have the potential to generate higher return and are best for long term investments

Subtypes are,

1) “Large Cap” funds which invest predominantly in companies that run large established business

2)“Mid Cap” funds which invest in mid-sized companies.

3)“Small Cap” funds that invest in small sized companies

4)“Multi Cap” funds that invest in a mix of large, mid and small sized companies.

B. Income Funds

1) These invest in Fixed Income Securities, like Government Securities or bonds, Commercial Papers, Bank Certificates of Deposits and Money Market instruments like Treasury Bills, Commercial Paper, etc.

2) These are relatively safer investments and are suitable for Income Generation

C. Hybrid Funds

These invest in both Equities and Fixed Income, thus offering the best of both, Growth Potential as well as Income Generation.

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