Types of mutual funds
1. Geographical Classification
-Domestic funds- Mobilize funds in India and invest in India.
-Off shore funds- Mobilize funds outside India and invest in India.
-International funds- Mobilize funds in India and invest outside.
2. Classification based on Sponsorship (who is operating the fund? Private sector or
government is running it)
-Public sector mutual funds- SBI, UTI, LIC
-Private sector mutual funds – HDFC, Axis, Kotak
-Foreign mutual funds- Edelweiss, Franklin Templeton
3. Classification based on Portfolio (where these fund houses invest)
-Equity funds or Growth funds- High return, High risk
-Debt funds or Income funds- bonds or debentures or government securities.
-Hybrid funds or Balanced funds (debt and equity)- When capital appreciation
is their primary objective.
-Index funds- NIFTY, SENSEX - Representation of the all companies in India
-Money market funds – (TB, CD, etc., short term money market instruments) –
Safety of investment- rotation of money is faster.
-Gilt edged funds (Government securities) return is less, but great safety.
-Sectoral Funds- (Pharmacy, IT, Banking, Automobiles).
-Specialty Funds- Investments in real assets (tangible assets) Gold, commodities.
-Thematic Funds- Based on some themes like, tax saving, retirement, marriage,
child benefits, child care.
-Hedge Funds – high risk funds, especially using derivatives.
-Fund of Funds – Invest happily in other funds.
4. Based on Functions (how it operates)
Open ended funds Close ended funds
Entry or exit anytime.
i. Always open for subscription.
ii. There is no pre-determined
maturity period.
iii. Corpus available for investment
keeps varying.
iv. Regular buying and selling of units
directly through schemes/AMCs.
v. B&S happens only at NAV.
Constraints on buying and selling, they
have a fixed maturity date.
i. Open only for specified period.
ii. There is a maturity period.
iii. Corpus is fixed.
iv. Through the market.
v. B&S only at Market Price.
