Types of Mutual Funds

Types of Mutual Fund :

Mutual Fund is Common Money of investors which is managed by  Asset management company.

Now the Popular perception of Mutual Fund is that They invest only in Share markets, this is a wrong perception, 

The mutual Funds can be divided as follows.

1.       Equity Mutual Funds : these invest the money in stocks listed on share market.

2.       Debt Mutual Funds : These invest the Money by giving the fund on loans

       E.g. Fixed Deposits in Bank,Company Fixed Deposits, Government Securities etc. 

       MF Taxation Link

There are mixed funds also which employ a mix of both which I explain in following table

Type	Equity Portion	Debt Portion	Final Investment in	Avge Returns	Risk	Optimum Investment period
Equity Funds	100%	0%	Listed Shares	12-15%	HIGH	5Yrs+
Balanced Funds	65%-75%	35%-25%	Listed Shares & Bank FD,Company FD	10-11%	Medium	3Yrs+
Income Funds	20%-30%	80%-70%	Bank FD, Company FD,Commercial Papers & Listed Shares	8-10%	Lower	2Yrs+
Debt Funds	0%	100%	Bank FD, Company FD,Commercial Papers,	8-9%	Low	1-3Yrs
Gilt Funds	0%	100%	Only Government Securities	8-9%	Minimal	1-2 Yrs
Liquid/Ultra Liquid Funds	0%	100%	Bank FD/Commercial papers for a term of 120 Days or less	7-9.5%	Minimal	Around 1 year