Types of Mutual Funds
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Types of Mutual Funds
Mutual funds are broadly classified based on asset allocation, investment strategy, and financial objectives. Each category is designed to suit different risk profiles, investment horizons, and wealth creation goals.
Equity Scheme Categories
| Scheme Category | Key Features |
|---|---|
| Large-cap Fund | Invest 80% in large-cap firms' equity and related securities |
| Mid-cap Fund | Invest 65% in mid-cap firms' equity and related securities |
| Small-cap Fund | Invest 65% in small-cap firms' equity and related securities |
| Multi-cap Fund* | Invest 65% in equity and related securities across market caps |
| Large and Mid-cap Fund | Invest 35% in large-cap and 35% in mid-cap firms' equity |
| Flexi Cap Fund | Invest in equity across all market capitalisations |
| Dividend Yield Fund | Majorly invest in dividend-yielding stocks and at least 65% in equity |
| Value Fund | Follow a value investment strategy, investing 65% in equity |
| Contra Fund | Follow a contrarian strategy, investing 65% in equity |
| Sectoral/Thematic Fund | Invest at least 80% in a specific theme or sector |
| Focused Fund | Invest 65% in equity, focusing on a maximum of 30 stocks |
| ELSS (Equity Linked Savings Scheme) | Invest 80% in equity and related securities |
Note: Multi-cap Fund is also referred to as Diversified Equity Funds.
Debt Scheme Categories
| Scheme Category | Key Features |
|---|---|
| Low-duration Fund | Invests in money market and debt securities with a portfolio Macaulay duration of 6 to 12 months. |
| Ultra-short Duration Fund | Invests in money market and debt securities with a portfolio Macaulay duration of 3 to 6 months. |
| Liquid Fund | Invests in money market and debt securities with a maturity of up to 91 days only. |
| Overnight Fund | Invests in overnight securities with a 1-day maturity. |
| Short-duration Fund | Invests in money market and debt securities with a portfolio Macaulay duration of 1 to 3 years. |
| Medium Duration Fund | Invests in money market and debt securities with a portfolio Macaulay duration of 3 to 4 years. |
| Money Market Fund | Invests in money market securities with a maturity of up to 1 year. |
| Medium- to Long-duration Fund | Invests in money market and debt securities with a portfolio Macaulay duration of 4 to 7 years. |
| Long-duration Fund | Invests in money market and debt securities with a portfolio Macaulay duration of more than seven years. |
| Corporate Bond Fund | Invests 80% of its total assets in the highest-rated corporate bonds. |
| Dynamic Bond Fund | Invests across different durations. |
| Banking & PSU Fund | Invests 80% of total assets in debt securities of banks, public sector undertakings, and public financial institutions. |
| Credit Risk Fund | Invests 65% of total assets in corporate bonds with an AA rating or lower. |
| Floater Fund | Invests 65% of total assets in floating rate instruments |
| Gilt Fund | Invests 80% of total assets in government securities. |
| Gilt Fund with 10-year Constant Duration | Invests 80% of total assets in government securities, maintaining a constant portfolio Macaulay duration of 10 years. |
Hybrid, Solution-Oriented & Other Schemes
| Scheme Category | Key Features |
|---|---|
| Balanced Hybrid Fund | Invests 40-60% in equity and related securities; 40-60% in debt securities. No arbitrage allowed. |
| Aggressive Hybrid Fund | Allocates 65-80% in equity and related securities; and 20-35% in debt securities. |
| Conservative Hybrid Fund | Invests 10-25% in equity and related securities; 75-90% in debt securities. |
| Dynamic Asset Allocation / Balanced Advantage Fund | Flexible management of equity and debt securities. |
| Multi-Asset Allocation Fund | Invests in a minimum of three asset classes, with a minimum 10% allocation in each. |
| Equity Savings | Puts at least 65% in equity and 10% in debt securities. |
| Arbitrage Fund | Follows an arbitrage strategy, with at least 65% in equity and related securities. |
| Children’s Fund | Lock-in period: Minimum 5 years or until the child reaches majority age, whichever is earlier. |
| Retirement Fund | Lock-in period: Minimum 5 years or until retirement age, whichever is earlier. |
| Index Funds / ETFs | Mirrors performance of the underlying market index |
| Fund of Funds | Allocates at least 95% of assets into underlying funds |