Classification of Mutual Funds

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Abstract:



Classification of Mutual Funds in India is done on the basis of their objective and structure. Classification of Mutual Funds in India has helped to categorize them into major types such as Funds of Funds, Regional Mutual Funds, Closed- End Funds, Large Cap Funds, and Interval Funds.

A glance at Mutual fund in India:



Mutual fund in India is a kind of collective investment that is managed professionally. In Mutual fund in India, the money is collected from a large number of investors and then it is invested in bonds, stocks, and various other securities.

The fund manager of Mutual fund in India collects the interest income which is then distributed among the individual investors on the basis of the number of units that they hold. Mutual fund's value of a share is calculated on a daily basis and is known as per share Net Asset Value (NAV).

Various kinds of Mutual funds in India:



Classification of Mutual Funds in India has been done on the basis of their investment objective and structure. Classification of Mutual Funds in India has be done into main types such as Income Funds, Sector- Specific Funds, Large Cap Funds, Fixed- Income Funds, Interval Funds, Closed- End Funds, and Tax Saving Funds. Income Funds in India are a kind of mutual fund whose aim is to provide to the investors with steady and regular income. They usually invest their principal in securities such as corporate debentures, bonds, and government securities.

Sector- Specific Funds in India are funds that make investments in specified sectors only. They give importance to one sector only such as pharmaceuticals, software, infrastructure, and health care. Large Cap Funds in India are a kind of mutual fund that makes investment in the shares of large blue chip companies. Fixed- Income Funds in India makes investment in debt securities that have been issued either by the banks, government, or companies. They are also known as income funds and debt funds.

Interval Funds in India are a combination of both the open and close ended funds. They offer the investors flexibility for they can be sold and repurchased at the period of time that has been predetermined. Closed- End Funds in India are a kind of mutual fund that has a maturity period that has been specified and which usually varies from three to fifteen years. Tax Saving Funds in India offer tax rebates to the investor under the Section 88, Income Tax Act. They are also known as equity- linked savings scheme.

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Last Updated 06/30/2011

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