Equity/Growth funds

A major part of the corpus of Equity/Growth funds is invested in stocks and the investment objective of these funds is long-term capital growth. When one buys units of an equity mutual fund, the person effectively becomes a part-owner of each of the securities in the fund’s portfolio. A minimum of 65% of the corpus is invested in equity and equity related securities. These type of funds invest in a variety of industries and may focus on multiple sectors, and are suitable for investors who have a long-term outlook and a high-risk appetite.

Debt/Income Funds

Debt/ Income funds invest in securities such as bonds, government securities (gilts), money market instruments, and corporate debentures. They invest more than 65% of the corpus in securities that have a fixed income. Debt/ Income Fund funds provide stable income with low risk to investors while preserving the capital. The funds give a regular income are less volatile compared to equity funds. Such funds suit investors who have the safety of capital with moderate growth as their main objective.

Balanced Funds

Balanced funds are those funds that invest both inequities as well as fixed income instruments that are in line with the pre-determined objective of the scheme. These funds provide stability of returns and also capital appreciation to the investors. Funds with allocation equally in equities and fixed income securities are suited for investors looking for moderate growth and an income as well. These funds usually invest around 60% in Equity and 40% in Debt instruments.

Money Market/ Liquid Funds

Funds of Money market or Liquid funds are invested in safer short-term instruments such as and Commercial Paper, Treasury Bills and Certificates of Deposit for short periods that are less than 91 days. The goal of Money Market or Liquid Funds is to provide easy liquidity, prevent erosion of capital, and provide a moderate income. The funds are suitable investments for individual and corporate investors who would like to have a moderate return on their surplus funds.

Gilt Funds

These funds invest only in government securities. While these funds have no credit risk, there can be an interest rate risk. As these funds invest in government securities they are safer.