A Mutual Fund is a strategic collection of various investment assets like stocks, bonds and other securities in well-defined proportions. The value of one unit of a mutual fund is called its net asset value (NAV).
Mutual funds offer exposure to multiple asset classes at a single point of investment and help reduce the investment risk by diversifying and balancing returns across various asset classes.
Categorization of mutual funds is extensive. A brief is mentioned below:
|Fund Structure||Open ended, closed ended and interval scheme|
|Purpose of investment||Growth schemes, income schemes, hybrid schemes and money market schemes|
|Underlying asset classes||Equity funds, debt funds/bond funds, hybrid funds, solution oriented funds, index funds (Exchange traded funds – ETF), overseas funds, funds of funds|
These categories can further be divided as well. Example: Equity funds are categorized into large cap funds, mid cap funds, small cap funds, multi cap funds et cetera (total of 11 categories exist).
To choose wisely which funds you need to be invested in to achieve your financial goals get in touch with WealthOK today!