What are the types of Mutual Funds? ~ General-Wiki

What are the types of Mutual Funds?

Hi Guys,

Today's topic is 'What are the types of Mutual funds?'. Yes, Mutual funds are an investment program funded by shareholders that trade in diversified holdings and is professionally managed. There are most popular mutual funds are listed below:

Money Market Funds
Fixed income Funds
Equity Funds
Balanced Funds
Index Funds
Specialty Funds
Fund-of-funds

Money Market Fund:

Money market funds are designed as low risk and lowest possible returns. Investors are investing on their money on Government document, State-level debut funds, Treasury funds. In this fund, you are getting the better interest rate on investment than Saving accounts and Current accounts or any deposits. Maturities should be less than one year and greater than one day. Money market transactions are not performed through a broker but it carried out via different mediums like documentation and oral communications. This fund is designed for effective monetary policies.

Fixed income Funds:

Fixed incomes funds give you periodic payment with interest or dividend rate. In Fixed Income fund, Individual funds are known as Fixed income but there are more than one categories like bonds funds, Exchange traded funds (ETF), Certificates of deposits (CDs) and Money market funds. Due to fixed income security, this funds having low risk and also gives you relatively lower returns.it is a good choice for risk-averse investors seeking a stable source of income in the period of time. Exchange trade funds (ETF) are a basket of investment that trade of single unit throughout a day.

Equity Funds:

An Equity Funds is mutual funds that invest money on stock/ share of private companies. The Equity Funds having Active and Passive Fund. In Active Fund, Fund Manager is investing money on that company who has better past review on stock market i.e. He is investigating on companies background details or upcoming projects, the performance of companies etc. In the Passive fund, the Fund manager is creating a portfolio which mirrors the stock of market. There are a Large cap, mid cap, and small cap or micro cap. It provides long-term appreciation and dividend income. It gives you high growth and returns with a moderate with high risk by investing in shares.

Balanced Funds:

Balanced funds are contained stock component and bond component or sometimes money market component. So it is called the Hybrid Funds. In Balanced Funds, The Investment is balanced into the stock and bond as in the ratio of 60:40. So it reduces the risk factors. The Balanced Funds for retirement allow to investor get payment periodically. Income funds seek to generate a stream of income, but also to achieve capital appreciations.

Index Funds:

Index funds are work like passively i.e. Fund Manager is creating a portfolio which mirrors the stock of market. Fund Manager is simply replicating benchmark. So that they do not the services to research analysts and others assists to the selection of other stocks. Index funds are tax efficient So that transaction cost in the funds making less expensive. It is long terms investment funds for capital appreciation. A Fund manager also has to hold the stock in its portfolio till official confirmation is received from the index.

Specialty Funds:

Specialty funds are contained in a small subset of the stock market. Most popular specialty fund is sector funds like banks, insurance company and real estate companies etc. It is a short-term fixed income security.

Fund-of-funds:

Fund-of-funds is an investment strategy in which a fund invests in other types of funds.it is not content to much risk. when you are rebalanced to maintain there will be no tax capital gains. It contains a high expansion ratio. Fund of funds investing on many funds which will be a further number of the securities.it is less exposure to market volatility in exchange for average returns.

If you have any query related to it please comment on it.

Thank for visiting.....🙂

About Rohit Urane

Hello guys, I loved to write articles. By professionally I am Software developer. When I am free read diffrent type of articles as well as write articles.

10 most useful books for Business