What are the different types of mutual fund categories, their key features, and benefits?

• The fund is diversified across different company sizes and sectors.
• This helps to spread risk.

• Fund managers have the flexibility to switch investments across large, mid, and small caps.

• This scheme focuses more on relative stability as compared to small and mid caps and growth potential. 
• It has a relatively lower volatility compared to small and mid caps .

• This scheme aims for balanced exposure to both relatively stable large cap companies and potential growth-oriented Mid cap companies.

65% in mid-cap companies (rank 101st to 250th)

• There is potential for growth over long term.
• However, this equity fund also carries relatively higher volatility compared to small cap.

65% in small-cap companies (rank 251st and below)

• It aims to offer high growth potential, but at very high risk and highest volatility compared to large and mid caps..

65% in dividend-yielding stocks

• This fund invests in companies paying dividends.

65% in equities* using a value strategy

• The fund managers buy undervalued stocks that have the potential to rise in the future.

• This scheme invests against prevailing market trends.

• This type of mutual fund scheme can place concentrated bets in limited companies. 
• There is a very high due to strong reliance on a few stocks. 

• You are exposed to a single sector like banking, IT, or pharma.
• Investors in this scheme are exposed to very high risk due to exposure to equity securities. In addition to the this, investors may also be exposed to fluctuations in a particular sector/theme and  due to a lack of diversification.

• This type of mutual fund scheme offers tax benefits under Section 80C in Old Tax Regime.
• It is more suitable for long-term investors without immediate liquidity needs. 

• Very short-term parking of money
• Can carry an very low risk.

• Useful for short-term needs.
• It can offer better returns than a savings account.

Debt + money market instruments with Macaulay duration (explained below), 3 to 6 months.

• It can be suitable for parking money for a few months.

• Works for an investment horizon of up to 1 year.

• It can be suitable for short-term goals (2 to 3 years).

• It can benefit investors looking to stay invested for a medium-term horizon.

• This debt fund type can be more suitable for a longer investment horizon.
• But it comes with interest rate risk.

• Seeks to offer relatively higher returns compared to lower duration funds.
• However, It also carries a higher risk from interest rate changes.

Money market instruments only with a maturity of up to 1 year.

• It can make a short-term investment in money market instruments..

Invests in debt instruments of all durations.

• Fund managers have the flexibility to adjust based on market outlook.
• They can switch investments across different instruments.

At least 80% in AA+ and higher-rated corporate bonds.

• Investors can aim to  get relatively stable returns from high quality papers.

At least 65% in AA and below-rated bonds.

• This debt fund type seeks to offer a higher return potential.
• However, It also comes with a higher credit risk.

At least 80% in bonds of banks, PSUs, PFIs, and municipal bonds.

• It aims to offer relatively more stability as it is backed by banks and government entities.

At least 80% in government securities (G-secs)

• This type of mutual fund scheme has negligible credit risk (sovereign risk).
• But returns are sensitive to interest rate movements.

At least 80% in G-secs with portfolio duration fixed at 10 years

• It is more suitable for long-term investors comfortable with interest rate swings.

At least 65% in floating rate instruments

• The returns are variable.
• They move in line with interest rate changes.

• This scheme places importance on  value of capital invested +  potential   income accruals.
• There is very limited equity exposure.

• You aim to get a balanced exposure to both equity and debt.
• No Arbitrage is permitted in this scheme.

• This hybrid mutual fund scheme is more growth-oriented.
• It has a higher equity exposure and carries a very high risk.

• The allocation between equity and debt changes dynamically based on market conditions.

At least 10% each in 3 asset classes (equity*, debt, others like gold)

• It can provide wider diversification beyond just equity and debt.

• This type of mutual fund scheme follows a low-risk strategy.
• It tries to take advantage of price differences in cash and derivatives markets.

Min. 65% in equity* + min. 10% in debt +  derivative instruments (

Minimum hedged & unhedged to be stated in the SID 

)

A 

scheme investing in equity, arbitrage and debt 

• This fund type in mutual fund scheme seeks to provide long term capital appreciation and income distribution to the investors by predominantly investing in equity, arbitrage and debt 
• It does so by using equity, debt, and derivatives together.

• By investing in such types of mutual fund scheme, you aim to build a retirement corpus.

Lock-in of at least 5 years, or till the child reaches the age of majority (whichever is earlier).

• This scheme seeks to create a corpus to let you meet the future expenses of your children, like education or marriage.

At least 95% investment in securities of a specific index.

• This is a passive fund, which tracks an index (like Nifty 50, Sensex,etc).
• The fund managers of this scheme do not engage in active stock picking. 
• The expense ratio is usually on the lower side.

• This type of mutual fund scheme invests in another mutual fund scheme, which may be Indian or foreign.
• Through this scheme, you aim to get an indirect exposure to different markets or investment strategies.