What is Mutual Fund? Different types of Mutual Fund.
A mutual fund is a collective investment scheme. In which money is taken from the investor and invested in stocks, bonds, short-term money market instruments, or other securities. Mutual funds are a great investment option for investors and invest in a variety of different assets.
Mutual funds give small or individual investors access to personally managed portfolios of equities, bonds, and other securities. The value of the mutual depends on the performance of the securities.
Mutual funds are divided into four categories: equity funds, debt funds, ELSS funds, and index funds. Let’s look more in depth at each category.
Equity Funds
Equity funds are either active or passive. In an active fund, the fund manager examines the market, conducts research on companies, examines performance, and selects stocks that are best for investment. In a passive fund, the fund manager constructs a portfolio that mirrors popular market indices such as the Sensex or the Nifty Fifty.
Debt Funds
Debt funds are mutual fund schemes that invest in fixed income instruments, such as corporate and government bonds, corporate debt securities, money market instruments, etc., that offer capital growth. Debt funds are also known as fixed income funds or bond funds.
ELSS Funds
ELSS is an equity linked savings scheme, which allows an individual or HUF under Section 80C of the Income Tax Act of 1961, out of total income of Rs. Allows deduction up to Rs. 1.5 lakh.
Index Funds
Index funds are passive mutual funds that mimic popular market indices. The fund manager does not play an active role in selecting industries and stocks to build the fund portfolio, but invests in all the stocks that make up the index it follows.
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Please don’t hesitate to give us a call if you would like more information about how we can manage your Mutual Fund Investments. You can also send us an email. ANG Finverse responds to your questions in a clear and timely manner. ANG Finverse offers clients a wide range of reliable planning and solutions for mutual fund investments.
