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Types of mutual funds

This document discusses different types of mutual funds. It begins with an introduction to mutual funds, explaining that they allow investors to pool money for investment in a basket of assets managed by professionals at low cost. The document then outlines the main types of mutual funds: On the basis of lock-in period, funds are either open-ended, allowing entry and exit at any time, or closed-ended, with a minimum three-year lock-in. Based on investment, the main types are equity funds (investing in stocks), ELSS funds (for tax benefits), debt funds, balanced funds (mixing equity and debt), and sectoral funds (focusing on a single industry). Equity funds include large

Economy & Finance◦
Related topics:
Portfolio Management• Mutual Funds•
SECURITY ANALYSIS &PORTFOLIO MANGEMENT TYPES OF MUTUAL FUNDS PRESENTED BY M INDRAJA 15331E0075
CONTENTS • INTRODUTION TO MUTUAL FUNDS • TYPES OF MUTUAL FUNDS – On the basis of lock in period – On the basis of investment – Other funds
MUTUAL FUNDS: INTRODUTION • Mutual Fund is an investment house where investor pools in money for investment in a basket of diversified assets, managed by professionals at relatively low cost.
• The funds collected are invested in various instruments such as capital market, money market and debt market instruments. • The investors get units in numbers on their investment INTRODUTION
TYPES OF MUTUAL FUND On the basis of lock in period • Open ended funds • Closed ended funds On the basis of investment • EQUITY • ELSS • DEBT • BALANCED • SECTORAL
ON THE BASIS OF LOCK-IN PERIOD MUTUAL FUND OPEN-ENDED CLOSED-ENDED
OPEN ENDED MUTUAL FUNDS • Any time entry and exit • Liquidity can be maintained by investing in open ended funds • Difficult to manage the funds, as the money flows in and out, so the total funds get changed frequently • The units are brought and sold at NAV
CLOSED-ENDED MUTUAL FUNDS • Minimum lock in period of 3 years • Short term returns are not possible • Number of units do not fluctuate on daily basis • Hence the number of units also remains same except through bonus or right issue • A new investor can buy units of close ended funds through secondary market
ON THE BASIS OF INVESTMENT MUTUAL FUNDS EQUITY ELSS DEBT BALANCED SECTORAL
EQUITY BASED MUTUAL FUND • A mutual fund that invests principally in stocks • A minimum of 65% of total investment should be in Indian equity • It includes various types such as LARGE CAP: Investment in companies having market capitalization more than $10 billion. MID CAP: Investment in companies having market capitalization between $2 billion to $10 billion.
DEBT BASED MUTUAL FUNDS It includes different types of schemes such as • Gilt Funds: These funds invest exclusively in government securities. Government securities have no default risk. • CORPORATE BONDS: For example ICICI prudential corporate bond fund • COMBINED: This better than the above two because investment only guilt securities may not even cover the inflation cost
Balanced Fund • It is a balanced fund of Equity and Debt • The investment is done in both equity and debt • For tax benefit investment in Indian equity should account for 65%
ELSS FUND • ELSS is a type of diversified equity mutual fund • Qualified for tax exemption under 80C • Investment up to 150000 are exempted under this section • It is usually comes with a lock in period of 3 years
SECTORAL FUNDS • Investments is done in stocks of a particular sector • This funds have high risk but also give high returns
OTHER FUNDS • International funds • Quant funds • Arbitrage funds
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