Growth Fund:

A diversified portfolio of stocks that has capital appreciation as its primary goal, with little or no
dividend payouts. Portfolio companies would mainly consist of companies with above-average
growth in earnings that reinvest their earnings into expansion, acquisitions, and/or research
and development.

Most growth funds offer higher potential capital appreciation but usually at above-average risk.
Growth funds are more volatile than funds in the value and blend categories. The companies in
a growth fund portfolio are in an expansion phase and they are not expected to pay dividends.
Investing in growth funds requires a tolerance for risk and a holding period with a time horizon
of five to 10 years.

Mid cap Fund:

A type of stock fund that invests in mid-sized companies. A company's size is determined by its
market capitalization, with mid-sized firms generally ranging from $2 billion to $10 billion in
market cap. 

Most stocks held in a mid-cap fund are firms with established businesses that are still
considered developing companies. These funds tend to offer more growth than large-cap stocks
and less volatility than the small-cap segment.

The size restriction for a mid-cap stock fluctuates between funds. The range of $2 billion to $10
billion is only an approximation, and it can change over time.

Value Funds:

A stock mutual fund that primarily holds stocks that are deemed to be undervalued in price and
that are likely to pay dividends. Value funds are one of three main mutual fund types; the other
two are growth and blend (a mix of value and growth stocks) funds.

Every large mutual fund family has a value fund component in which funds are often broken
down by size. For example, a fund family may include small-, mid- and large-cap value funds for
investors to choose from. The premise of value investing is that the market has inherent
inefficiencies that enable companies to trade at levels below what they are actually worth. In
theory, once the market corrects these inefficiencies, the value investor will see the share price
rise.    
A common misconception is that value investors simply seek out stocks with low price/earnings
ratios. Although this can be a characteristic of an undervalued company, this is not the sole
feature that astute value investors seek.

Equity Income Funds:

A type of mutual fund that invests in high-quality companies with a reliable history of dividend

payments and growth in the dividend rate.

In the mutual fund context, the investment objective will be a combination of generating both
moderate current dividend income and moderate capital appreciation.

Hedge Funds:

An aggressively managed portfolio of investments that uses advanced investment strategies

such as leveraged, long, short and derivative positions in both domestic and international
markets with the goal of generating high returns (either in an absolute sense or over a specified
market benchmark). 

Legally, hedge funds are most often set up as private investment partnerships that are open to
a limited number of investors and require a very large initial minimum investment. Investments
in hedge funds are illiquid as they often require investors keep their money in the fund for at
least one year.

Sector Funds:

A stock mutual, exchange-traded or closed-end fund that invests solely in businesses that

operate in a particular industry or sector of the economy. Because the holdings of this type of
fund are in the same industry, there is an inherent lack of diversification associated with these
funds.

These funds tend to increase substantially in price when there is an increased demand for the
product or service offering provided by the businesses in which the funds invest. On the other
hand, if there is a downturn in the specific sector in which a sector fund invests, the fund will
often face heavy losses as a result of the lack of diversification in its holdings.
Exchange Traded Fund (ETF):

A security that tracks an index, a commodity or a basket of assets like an index fund, but trades
like a stock on an exchange. ETFs experience price changes throughout the day as they are
bought and sold.

Because it trades like a stock, an ETF does not have its net asset value (NAV) calculated every
day like a mutual fund does. 

By owning an ETF, you get the diversification of an index fund as well as the ability to sell short,
buy on margin and purchase as little as one share. Another advantage is that the expense ratios
for most ETFs are lower than those of the average mutual fund. When buying and selling ETFs,
you have to pay the same commission to your broker that you'd pay on any regular order. 

One of the most widely known ETFs is called the Spider (SPDR), which tracks the S&P 500 index
and trades under the symbol SPY.

Equity Linked Savings Scheme (ELSS):

Equity linked saving schemes is a kind of mutual funds like diversified equity funds with Tax
benefits. It is just like other tax saving instruments like National Savings Certificate and Public
Provident Fund. Main advantage with ELSS is lock-in period is only 3 years

As per Income Tax act 80c investment up to Rs 1,00,000 are eligible for deduction from the
gross total income hence reducing the total taxable income. For example if your total annual
income is Rs 3,00,000 and you invest Rs 1,00,000 in ELSS then your taxable income will become
Rs 2,00,000.

Advantages of ELSS

1. Main advantage of ELSS is its short lock-in period.

2. Since it is an equity linked scheme earning potential is very high.
3. Investor can opt for dividend option and get some gains during the lock-in period
4. Investor can opt for Systematic Investment Plan
5. Some ELSS schemes also offer personal accident death cover insurance
6. Provides 30 to 40% returns compared to 8% in NSC and PPF

Disadvantages of ELSS

1. Risk factor is high compared to NSC and PPF

2. Premature withdrawal is not allowed but it is allowed in other instruments in some specific
conditions.