At this point, we know (we think) we’ve already convinced you to start investing in mutual funds in India.
So, we won’t tell you this again today.
(But please look into mutual fund investing, especially if you’re a young investor!)
Okay. Now, we won’t tell you this again.
But, what we want to talk about today, is some of the different types of mutual funds in India that you can opt to invest in. Please keep in mind that this is a baseline-level list – and if you really get into it and decide to look it up, you will find that there are a lot of different types of mutual funds to invest in.
Let’s not dilly-dally, folks! Straight to it!
Types of Mutual Funds – Based on Market Capitalization
(How big is the fund you are investing in?)
The market capitalization of a company represents its worth in the market. There are three categorizations of mutual funds based on their market capitalization –
Types of Mutual Funds – Based on Investment Objectives
(Why are you investing to begin with?)
It is important that your mutual fund investments align with your financial and personal goals. No two investors will have the same investment goals – so, remember that you have to pinpoint the right investment for yourself, rather than following the herd!
Types of Mutual Funds – Based on Asset Classes
(Where is your money getting invested?)
There are two main types of mutual funds that are categorized based on what kind of assets your money is getting invested in.
Bonus – Hybrid Funds – These types of mutual funds are a combination of equity and debt funds. These types of mutual funds leverage the power of diversification, by investing your money in both kinds of asset classes.
Types of Mutual Funds – Based on the Risk Profile
(How risky are these investments?)
Risk is probably the most important thing associated with investing. And no, there is no such thing as risk-free investing! It is important to understand this classification of mutual funds and find the right investment choice for yourself, based on your risk capacity. We’ll keep this simple!
And with that, this comprehensive guide for different types of mutual funds in India comes to a close.
So, now you definitely know you have to invest in mutual funds (we established this straight off the bat!), and you have some insight into what options are out there. Now, it’s time to start doing your own due diligence and finding the best investment option to create a financial plan that can help you achieve your goals.