Types of Mutual Funds

There are a variety of funds available across categories. There are funds which invest in growth stocks, funds which specializes in stocks of a particular sector, funds which assure returns to the investors, funds which assure returns to investors, funds which invest in debt instruments, and funds which invest aggressively in the stocks. Thus , we have income funds, balanced funds, liquid funds, gilt funds, index funds, Exchange Traded Funds, sectoral funds, and then there are openended and closed-ended funds and assured return funds-----there is a fund for every requirement. MFs can be classified according to their maturity period. A closed ended fund has a stipulated maturity, the investors have to wait until maturity for redemption. A open-ended fund gives investors an option to redeem and buy units at any time from the fund. These schemes do not have a fixed maturity and can be traded conveniently at NAV prices declared on a daily basis.