Dividend gets automatically credited to the account of the investor through ECS/NACH. How Empaths Become The Narcissists’ Narcissists, Rich, Please: How The Pleas Of India’s Wealthy Seem ‘Fake’ To The Masses. They carry a fixed tenure ranging between less than a month and a few years. The different types of mutual funds – Mutual Fund Schemes Appropriate for You. Investments in mid-caps and small caps carry higher risks with potential to offer higher returns. To allude briefly to the types, here’s presenting them one by one. Selection of scheme must be linked to the risk profile of the investor. Over a period, these stocks migrate to large caps based on performance and growth as in the case of Infosys which started as a small cap. Balanced funds are there to offer investors both regular as well as growth income. The return of the scheme depends on the performance of chosen sector. Can one invest in multiple asset classes using one Mutual Fund scheme? Dividend is tax free in the hands of recipient. The investment in bonds, government securities, etc makes the NAV’s less volatile than pure equity mutual funds. The details of different schemes are as follows: Equity Funds ( or Diversified Equity Funds ) The profit is distributed amongst investors as dividend or it gets added to the assets of the mutual fund, which increases its NAV. The disclosures here are offered with documents of the mutual fund scheme accordingly. An understanding of the features of different types of mutual fund schemes will enable investors to take informed decisions. This type of mutual funds doesn’t include some fixed maturity periods. These invest in Fixed Income Securities, like Government Securities or Bonds, Commercial Papers and Debentures, Bank Certificates of Deposits and Money Market instruments like Treasury Bills, Commercial Paper, etc. This type of Mutual fund schemes is known as gift fund which invests in government securities. Mutual Fund Categories Invest in ELSS Start a SIP Equity Funds Hybrid Funds Debt Funds Other Funds (ETF & FoF) Special Situation Funds SIP Calculator Distributor's Lounge IFA Connect Investor Services Connect With Us The different types of mutual funds – Mutual Fund Schemes Appropriate for You There are a wide range of mutual fund schemes. Sectoral funds: These schemes too invest in the stock market. Are there different kinds of equity funds available? However, the above terms are still being used widely. In growth options, the NAV increases and benefit can be encashed by selling the units at a higher NAV. FMPs offer steady returns for fixed tenure and this makes them similar to a Bank Fixed Deposit. As a matter of fact, the NAVS can rise or fall with regard to the index’s rise or fall. Equity Schemes 2. If you know what you require with one mutual fund, the decision of choosing the most appropriate one can get simpler. Past performance and the proportion of investments are the two factors to be considered while investing in balance MF schemes.