There are a wide variety
of Mutual Fund schemes that cater to your needs, whatever your
age, financial position, risk tolerance and return expectation.
Whether as the foundation of your investment program or as a
supplement, Mutual Fund schemes can help you meet your financial
goals. The different types of Mutual Funds are as follows:
Diversified Equity Mutual Fund Scheme
A mutual fund scheme that achieves the benefits of diversification
by investing in the stocks of companies across a large number of
sectors. As a result, it minimizes the risk of exposure to a single
company or sector.
Sectoral Equity Mutual Fund Scheme
A mutual fund scheme which focuses on investments in the equity
of companies across a limited number of sectors -- usually
one to three.
Index Funds
These funds invest in the stocks of companies, which comprise
major indices such as the BSE Sensex or the S&P CNX Nifty
in the same weightage as the respective indice.
Equity Linked Tax Saving Schemes (ELSS)
Mutual Fund schemes investing predominantly in equity, and offering
tax deduction to investors under section 80 C of the Income
Tax Act. Currently rebate u/s 80C can be availed up to a maximum
investment of Rs 1,00,000. A lock-in of 3 years is mandatory.
Monthly Income Plan Scheme
A mutual fund scheme which aims at providing regular income (not
necessarily monthly, don't get misled by the name) to the unitholder,
usually by way of dividend, with investments predominantly
in debt securities (upto 95%) of corporates and the government,
to ensure regularity of returns, and having a smaller component
of equity investments (5% to 15%)to ensure higher return.
Income schemes
Debt oriented schemes investing in fixed income securities such
as bonds, corporate debentures, Government securities and money
market instruments.
Floating-Rate Debt Fund
A fund comprising of bonds for which the interest rate is adjusted
periodically according to a predetermined formula, usually
linked to an index.
Gilt Funds - These funds invest exclusively
in government securities.
Balanced Funds
The aim of balanced funds is to provide both growth and regular
income as such schemes invest both in equities and fixed income
securities in the proportion indicated in their offer documents.
They generally invest 40-60% in equity and debt instruments.
Fund of Funds
A Fund of Funds (FoF) is a mutual fund scheme that invests in
other mutual fund schemes. Just as fund invests in stocks or
bonds on your behalf, a FoF invests in other mutual fund schemes |