What are the various types of mutual funds?

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Various types of Mutual Fund schemes exist to cater to different needs of different people. Largely there are three types mutual funds.

  1. Equity or Growth Funds

  • These invest predominantly in equities i.e. shares of companies
  • The primary objective is wealth creation or capital appreciation.
  • They have the potential to generate higher return and are best for long term investments.
  • Examples would be
    • “Large Cap” funds which invest predominantly in companies that run large established business
    • Mid Cap funds” which invest in mid-sized companies. funds which invest in mid-sized companies.
    • “Small Cap” funds that invest in small sized companies
    • "Multi Cap funds" that invest in a mix of large, mid and small sized companies.
    • “Sector” funds that invest in companies that are related to one
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