Classification can be done on the basis of objective as follows;
| Fund Objective |
What the fund will
invest in |
| Equity (Growth) |
Only in stocks |
| Debt (Income) |
Only in fixed-income
securities |
| Money Market (including
Gilt) |
In short-term money market
instruments (including government securities) |
| Balanced |
Partly in stocks and
partly in fixed-income securities,
in order to maintain a 'balance' in returns and risk |
|
Funds
can be classified according to their Structures
1) Open-ended Funds
At any time during the scheme period, investors can enter and exit the
fund scheme (by buying/ selling fund units) at its NAV (net of any load
charge). Increasingly, AMCs are issuing mostly open-ended funds.
2) Close-Ended Funds
Redemption can take place only after the period of the scheme is over.
However, close-ended funds are listed on the stock exchanges and
investors can buy/ sell units in the secondary market (there is no
load).
|
