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