Open Ended Funds

On the basis of asset category type, a mutual fund scheme can be categorized as

Money Market Funds / Liquid Funds:

 These are funds that invest in short term liquid financial instruments like treasury bills, CBLO, CPs etc. These funds are ideal if you want to park your surplus money in mutual funds that earn better returns than FDs and savings accounts in the short term. This allows you to earn returns in the interim period while awaiting better opportunities in the equity markets.

Debt / Income Funds: 

Debt Funds are the least risky type of mutual fund investments, as the corpus is invested in government securities, debentures, and other debt-related instruments. This is a low risk-low return investment and is ideal if you are willing to assume low risks and earn regular income.

Equity Funds: 

These are funds that invest in equity shares of companies. These are considered high-risk funds but also tend to provide high returns. Equity funds can include specialty funds like infrastructure, FMCG, Banks etc… They are linked to the markets and tend to be very volatile

Balanced Funds/ Hybrid Funds: 

These are funds that invest in a mix of asset classes. In some cases, the proportion of equity is higher than debt while in others it is the other way round. Risk and returns are balanced out this way.