Mutual funds come in different categories based on where they invest and how much risk they carry. Here's a plain-language guide to the main ones, so you know what you're choosing between.
Predominantly invest in company stocks, aiming for long-term capital growth. Suited to goals 5+ years away and a higher risk appetite.
Invest in bonds, government securities and money-market instruments, aiming for relatively steady, lower-volatility returns.
Blend equity and debt in a single scheme, aiming to balance growth potential with relative stability.
Equity-oriented schemes that qualify for deduction under Section 80C, with a 3-year statutory lock-in.
Passively track a market index such as the Nifty 50 or Sensex, typically at a lower expense ratio.
Park short-term surplus cash in very low-duration instruments, prioritising safety and easy access over growth.
Offer exposure to overseas markets and global companies, useful for geographic diversification.
Goal-linked schemes for retirement or children's milestones, usually with a defined lock-in period.
