Mutual Fund And Different Mutual Fund Investment Schemes In India
A Mutual Fund is the investment of money in the stock market, money market or any other variable. Mutual Funds collect money from various investors and invest in buying stocks, shares or any other securities. The person who manages all these investments are called Fund Managers.
Types Of Mutual Funds
There are countless mutual fund schemes from where investor can choose the best mutual fund scheme according to its financial ability. Below are some of the most popular mutual funds schemes in which you can invest your money for your bright and secure future.
. Money Market Funds
Money Market Funds are the funds that put the resources into liquid instruments such as T-Bills, CPs and so on. The Money Market Funds are viewed as the best safe investments for those who are looking to park surplus for the quick however moderate returns. Currency market are also referred to as the money markets and come with risks in terms of the reinvestment risk, interest risk and credit risks. In Money Market Funds we can do short term investment and fixed income investment securities like:
a) Banker’s Acceptances
b) Certificate Of Deposit
c) Government Bonds
d) Commercial Paper
e) Treasury Bills
. Fixed Income Funds
Fixed Income Funds pay us a fixed rate of interest by buying investments that pay a fixed rate of return. They aim to have money coming into the fund on regular basis, mostly through interest that the fund earns. The different fixed income funds may include:
a) Government Bonds
b) Investment Grade Corporate Bonds
c) High Yield Corporate Bonds
Out of all these investment bonds generally high yield corporate bond fund is more risky than all others bonds.
. Equity Funds
Equity Funds are the funds that put resources in the equity stocks or shares of an organizations. Basically equity fund is more risky funds than fixed income or money market funds as it focus mainly on investment of your money in stocks in order to give you a faster growth rate. These funds mainly include investment funds such as:
a) Small Cap Stocks
b) Mid Cap Stocks
c) Large Cap Stocks
d) Income Funds
e) Growth Stocks
. Balanced Funds/Hybrid Funds
Balanced Fund is a combination of funds that may include of fixed income equities and securities. These balanced funds target on achieving higher return rate against losing money in risky situations. Sometimes, the extent of the equity is higher than the debt while in others it is the other route round. A best example of a hybrid fund or balanced fund would be Franklin India Balanced Fund-DP (G) because in this fund 65% to 80% of the investment is made in the equities and the rest of the fund 20% to 35% is put in resources into the debt market. This investment plan is less risky as compare to pure equity funds.
. Debt Funds
Debt Funds are the funds that put the resources into debt instruments such as organization debentures, government bonds and other fixed income resources. The debt funds are viewed as sheltered investments and give fixed returns. These assets do not deduct the charge at the source so if the earning from the investment is more than Rs.10,000 then the financial specialist is liable to pay the tax on it himself.
. Tax Saving Funds
Tax Saving Funds are the funds that put fundamentally into equity shares. Investments made in these assets qualify for deductions under the IAC (Income Tax Act). These investments are viewed as high on risk, yet additionally offer good returns if the fund performs well.
. Types Of Mutual Fund Investments Plans
Apart from best mutual fund investment types there are many different schemes available such as:
SBI Focused Equity Fund
SBI Contra Fund
SBI Equity Hybrid Fund
ICICI Prudential Mutual Fund
AMFI (Association of Mutual Funds)
Birla SL Equity Fund
HDFC Small Cap Fund
Kotak Standard Multi Cap Fund
SBI Healthcare Opportunities Fund
Axis Blue Chip Fund
As there are large number of mutual funds available in the market, so choosing one that suits the specific investment needs the most isn't a simple task. The best and simplest way is that you have to first comprehend with your own personal needs. Since mutual funds consistently accompany a risk factor related to them, regardless of how small, it is important that investors read their policy document very carefully before investing in any type of investment schemes. It would also be a smart thought to read the report to guarantee that they, the investors have seen precisely what they have put resources into and all the facilities related to that investment schemes.