Mutual Fund is a type of investment where we can invest our money and can expect higher returns. Mutual funds can be classified into 3 major categories.
1. Equity Mutual Funds: Equity schemes endeavor to provide a potential for high growth and returns with a moderate to high risk by investing in shares. Such schemes are either actively or passively (replicate indices) managed, and are best suited for investors with a long-term investment horizon.
2. Debt Mutual Funds: Debt Funds are those which allocate unit holders money in fixed-income earning instruments i.e. treasury bills, corporate bonds, government securities, commercial paper and other money market instruments.
3. Hybrid Mutual Funds: A hybrid fund is an investment fund that is characterized by diversification among two or more asset classes. These funds typically invest in a mix of stocks and bonds. They may also be known as asset allocation funds
Mutual Funds can be classified into 2 types
1. Open Ended Funds: In open-ended funds, you can invest your money any time also, you have the provision of withdrawing the money simultaneously.
2. Close Ended Funds: In close-ended funds you have to invest your money for a certain period of time.