Types of Mutual Funds

There are several types of mutual funds, including:

1. Equity Funds: These funds invest in stocks or equity shares of companies and are suitable for investors with a long-term investment horizon.
2. Debt Funds: These funds invest in fixed-income securities like bonds, debentures, and government securities.
3. Balanced Funds: These funds invest in both equity and debt instruments and aim to provide a balance between risk and return.
4. Money Market Funds: These funds invest in short-term, low-risk debt securities like Treasury bills, commercial papers, and certificates of deposit.
5. Index Funds: These funds invest in a portfolio of stocks that mirrors a particular stock market index like the S&P 500.
6. Sectoral Funds: These funds invest in a specific sector of the economy like healthcare, technology, or infrastructure.
7. Tax-saving Funds: These funds offer tax benefits under Section 80C of the Income Tax Act, 1961.
8. Exchange Traded Funds (ETFs): These funds are similar to mutual funds but are traded on stock exchanges like a stock.