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Mutual Funds


What is a mutual fund?

Mutual funds let you pool your money with other investors to "mutually" buy stocks, bonds, and other investments.

  • They're run by professional money managers who decide which securities to buy (stocks, bonds, etc.) and when to sell them.
  • You get exposure to all the investments in the fund and any income they generate.
  • They offer a wide variety of investment strategies and styles. 


Why invest in mutual funds?



  • DiversificationMutual funds let you access a wide mix of asset classes, including domestic and international stocks, bonds, and commodities. 

  • Low costsBecause a mutual fund buys and sells large amounts of securities at a time, its transaction costs are typically lower than what you would pay as an individual investor.

  • ConvenienceBuying mutual funds can be straightforward. Many banks and brokerage firms, including Schwab, have their own line of proprietary mutual funds as well as access to thousands of third-party funds.

  • Professional managementYou get the benefit of having a professional manager reviewing and researching the fund's portfolio on an ongoing basis.

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Types of Mutual funds



Diversify your investment portfolio with various Mutual Funds. There’s a diverse range of options out there, each tailored to specific investment goals, risk levels, asset classes and structures. Whether you're aiming for growth, income or specialised investments, Mutual Funds provide versatile avenues to building wealth.

Types of Mutual Funds based on asset class

An asset class refers to a category of financial assets with similar characteristics and behaviours, such as stocks, bonds, real estate or cash equivalents. Discover diverse Mutual Funds categorised by an asset class.

1. Equity Funds ​invest in shares of companies. For example, large-cap Equity Funds target well-established, large companies, while small-cap funds focus on smaller, high-growth businesses.

2. Debt Funds ​ invest in bonds, providing a steady income. They include categories like Government Bond Funds and Corporate Bond Funds.

3. Money Market Funds  funds invest in low-risk, short-term securities, such as Treasury bills and commercial paper.

4. Hybrid Funds (Mix of assets) blend both stocks and bonds, like balanced funds that aim for growth and stability in a single package.

Types of Mutual Funds based on Investment goals

These funds cater to specific financial objectives, offering diverse options to match the investors' unique goals.

1. Growth Funds focus on capital appreciation by primarily investing in stocks of companies with high growth potential. They are suited for long-term investors seeking substantial returns.

2. Income Funds emphasise regular income generation by investing in bonds, fixed-income securities or dividend-yielding stocks. They suit investors looking for a steady income stream.

3. Liquid Funds prioritise liquidity and safety, investing in short-term debt instruments. They are ideal for investors seeking quick access to funds with minimal risk.

4. Tax Saving Funds also known as ELSS, offer tax benefits under Section 80C. They invest primarily in equities and serve as a tax-efficient investment option.

5. Aggressive Growth Funds target substantial capital appreciation and are willing to accept higher market risks. They suit investors with a long-term horizon and a risk-taking approach.

6. Capital Protection Funds focus on safeguarding the principal amount while generating modest returns. They are ideal for risk-averse investors looking to protect their investments.

7. Fixed Maturity Funds have a predetermined maturity date, providing investors with a clear investment horizon. They are suited for those looking for fixed returns and minimal interest rate risk.

8. Pension Funds aim to create a corpus for retirement by investing in a mix of assets. They cater to individuals planning for a secure post-retirement financial future.

Types of Mutual Funds based on structure

Mutual Funds are categorised by structure, influencing how investors buy and sell units. These structures include open-ended, closed-ended and interval funds.

1. Open-ended Funds allow investors to buy and sell units continuously, providing liquidity. These funds are suitable for investors looking for flexibility in terms of entry and exit points and they are commonly used for long-term wealth creation.

2. Closed-ended Funds have a fixed maturity period and a limited number of units. Investors can buy units only during the initial offer period and they can trade these units on stock exchanges. These funds are ideal for those seeking long-term investments with potential tax benefits.

3. Interval Funds combine features of open and closed-ended funds. They allow periodic redemption requests, typically at predetermined intervals. This structure suits investors looking for a balance between liquidity and long-term investments.

Types of Mutual Funds based on risk

Different Mutual Funds come with their own level of risk, from very low to high, offering choices for diverse investor profiles.

1. Very low Risk Funds like Money Market Funds, primarily invest in low-risk securities. These are ideal for conservative investors seeking capital preservation and minimal fluctuations in the investment's value.

2. Low Risk Funds such as Government Bond Funds, aim for income generation with a slightly higher risk than very low risk options. They are suitable for investors with a slightly higher risk tolerance.

3. Medium Risk Funds like balanced funds, offer a balance between risk and reward by combining equity and debt investments. These suit investors seeking moderate growth with a manageable level of risk.

4. High Risk Funds such as sector-specific Equity Funds, focus on capital appreciation with increased risk. These are for investors willing to accept higher volatility in pursuit of potentially higher returns.

5. Specialised Mutual Funds explore unique investment options to diversify and meet specific financial objectives with Specialised Mutual Funds.

6. Sector Funds focus on specific industries or sectors, allowing investors to target areas they believe will perform well.

7. Index Funds replicate a market index's performance, providing low-cost exposure to the overall market or specific segments.

8. Funds of Funds invest in other Mutual Funds, offering a diversified portfolio through a single investment.

9. Emerging Market Funds invest in developing economies, offering growth opportunities with a higher risk.

10. International/ Foreign Funds invest outside the investor's home country, diversifying risk and potentially boosting returns.

11. Global Funds  combine domestic and foreign investments, offering a broad geographic diversification.

12. Real Estate Funds invest in properties, providing exposure to the Real Estate market without buying physical assets.

13. Commodity-focused Stock Funds invest in companies related to commodities, allowing indirect exposure to the commodity market.

14. Market Neutral Funds aim to generate returns while reducing market risks by balancing long and short positions.

15. Inverse/Leveraged Funds aim to provide returns inversely related to an index's performance or amplify returns.

16. Asset Allocation Funds automatically adjust the portfolio's allocation to maintain a specific risk-return profile.

17. Gift Funds are designed for charitable giving, offering tax advantages to donors while supporting causes.

18. Exchange Traded Funds (ETFs) combine elements of Mutual Funds and Stocks, providing liquidity and a diversified exposure.