Mutual Fund Investment Categories and Schemes

Mutual fund companies offer different schemes. There are many categories in the fund.

Different Fund Categories:

• Equity, Debt, Hybrid, Balanced and Liquid are the major categories. Investing in mutual funds is generally risky. Since market conditions are not always constant, there is a lot of risk involved.
• Equity funds are risky in all categories. On the other hand, they have high returns. Equity schemes have many sub categories. Diversified Equity, Large Cap, Equity Linked Savings Scheme, Sectoral and Index and Exchange Traded are some of them.
• Debt schemes are less risky. Investments are made in government organizations and corporate in debt schemes. With less risk in these plans, the returns are also less.
• Balanced plan is a mix of debt and equity. As the name itself suggests, everything about this scheme is balanced. The risk as well as returns are good in these balanced schemes.

Investment Plans:

As there is more competition, more number of plans are being offered. Currently various techniques like SIP and VIP are put into practice. Systematic investment plan was launched to target middle class people and rural people. The total investment is allowed to be paid in SIP in the form of Equated Monthly Installments. Volatile markets require techniques such as value investing planning. Some plans are economical and have practical uses. Some of them are listed here below.

• The magnum tax gain was introduced by SBI. It has the facility of tax exemption. Here tax exemption is allowed on the amount less than 1 lakh.
• Small SIP was also introduced by SBI. Here the monthly installment is in the range of 100 to 500 only.