• About Us
  • Terms and Conditions
  • Disclaimer
  • Privacy Policy
  • Contact Us
  • Write for Us

Financesmarti

One Stop for Finance Updates

  • Home
  • Cryptocurrency
  • Credit Cards
  • Trading
  • Guides
  • Investment
  • Banking
  • Bandhan Bank Net Banking
    • Bandhan Bank Loans
    • Bandhan Bank FD Rates
    • Bandhan Bank Customer Care
    • Bandhan Bank Balance

Types of Mutual Funds Based on Investment Objectives

May 28, 2020 By Smriti Leave a Comment

Tweet
Share
Pin
Share
0 Shares

What is Mutual Fund? With respect to mutual funds, many creditors pool their investments in a trustworthy way. It is one such investing tool. Indeed, this investment is handled by an experienced team of finance professionals, known as the Asset Management Company (AMC), who further invest this accrued capital in various financial products such as securities, stocks, commodities, etc.

In fact, investors participating in mutual funds have a similar purpose, so it cannot be misunderstood to assume that the returns received by such forms of assets are proportionately assigned to the money invested. Few banks that provide mutual funds are ICICI, SBI, HDFC Bank, Federal etc. If it comes to eligibility and documents, though, various banks have specific requirements, and before investing in mutual funds you have to consult with the bank itself.

Now let’s seek to understand why and how necessary it is to invest in mutual funds.

Why should you invest in mutual funds?

types-of-mutual-funds

Read More – How to Invest in the SP 500 Index – a Complete Guide

Despite not just one but for several purposes, people choose to invest in mutual funds. Yeah, it is, without a doubt, a smart choice to invest in mutual funds, for the following reasons.

  • Mutual fund investing is nothing short of qualified investment management.
  • For a large capital base, creditors may not typically fulfill the minimum investment criteria they might have in specific inventories.
  • The risk of financial growth may be regularly tracked, ultimately minimizing risks of loss, with the help of a professional fund manager and a diversified portfolio of asset investments.

Okay, the mutual funds have the following types, based on the investment objective:

Equity Fund 

  • Funding is mainly invested in stocks in equity funds.
  • Returns are higher, so the risks are also higher.
  • Equity funds may be rewarding because tax exemptions are made on long-term capital gains.

Debt Funds

  • The funds are primarily invested in government or business shares and bonds in debt funds.
  • Investments here can be short- and long-term and get lower risk featured fixed returns.
  • You can benefit indexation benefits in order to save on tax in long-term investment.

Balanced Funds

mutual-funds

  • Balanced funds produce large stock earnings and stable yields, effectively helping to equalize the risk factor.

Must Read – Top 5 Best Trades Ever Made Including The Great Profitable Exit Of Mark Cuban

Index Fund 

  • Index funds are designed to represent the market index portfolio.
  • You don’t have to track them vigorously.
  • The risk is commensurate with fluctuations in the index.

Gilt Fund 

  • Investment is in government securities solely so there is no default chance.
  • Market volatility determines the value of the gilt fund units.
  • The return-risk ratio here is similar to that in equity funds.

Global Funds

  • Funds are held in assets outside India in global funds.
  • Introduces another home diversification layer.
  • The risks involved are understood by those investors who well know the international market.

Fund of Funds 

  • Instead of assets, funds are directly invested in mutual fund
  • Instead of market instruments, your investments are diversified in mutual fund
  • The funds’ returns are going to be an average.
Smriti
Smriti

Smriti Jain is the owner and senior content publisher at Financesmarti. Financesmarti is a website where she shares a lot of useful stuff for the people and business of India. This includes small business ideas and other banking information, as well. Smriti completed her education in science & technology from Delhi University. Smriti usually has interests in digital marketing now, and she has chosen this career for the full-time opportunity. The primary purpose of starting this blog to provide quality information on the banking industry to the people.

Filed Under: Saving Schemes

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Recent Posts

  • TATA POWER COMPANY SHARE PRICE TARGET 2023 TO 2030: CAN TATA POWER REACH 2000 INR?
  • BAJAJ HOLDINGS AND INVESTMENT LTD SHARE PRICE TARGET 2023 TO 2030: CAN BAJAJ HOLDINGS REACH 100000 INR?
  • BANK OF INDIA SHARE PRICE TARGET 2023 TO 2030: CAN BOI REACH 1000 INR?
  • How to Trade Forex: A Beginner’s Guide
  • SBI SHARE PRICE TARGET 2023 TO 2030: CAN SBI REACH 5000 INR?
  • What is the 50 30 20 rule?
  • BANK OF BARODA SHARE PRICE TARGET 2023 TO 2030:CAN BOB REACH 3000 INR?
  • What are the 10 benefits of insurance?
  • What are the three C’s of investing?
  • What are the five parts of a portfolio?

Finance Smarti

Copyright © 2023 · All rights Reserved - Submit a Guest Post