By Definition Mutual Funds is a Pool of money, managed by a Professional Fund Manager of an A.M.C or a Mutual fund House. In Layman terms, lot of investors pool their money together by investing in scheme of Mutual Fund Company and their investments are managed by a Fund Manager.
There are various categories of Mutual Funds :
- Large Cap Equity Funds: These kinds of Mutual Funds Primarily invest in Stocks of Large Cap Companies.
- Mid Cap and Small Cap Equity Funds: These kinds of Mutual Funds Primarily invest in Stocks of Mid Cap and Small Cap Companies.
- Balanced Funds: These Funds have a Balanced approach in investing in both the Debt and Equity Market for stable returns.
- Sectoral/Thematic Funds: These funds generally are bullish on a Particular Sectoral Stockslike-Banking, Pharma, Infrastructure etc.
- E.T.F Funds (Exchange Traded Funds): Generally are Gold E.T.F popular for keeping gold in ademat form.
- Debt Funds: As discussed earlier give a stable return and are very safe, these include long term, short term, ultra short term, Liquid ,Fixed Income, Gilt Funds etc.
- Funds of Funds: These schemes invest in various schemes of other Mutual Funds.
- Index Funds: These Funds generally move in tandem with the respective Benchmark Indexlike –Nifty 50,BSE-30 etc.