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Mutual Funds can be broadly categorized in to:
Categorization as per SEBI:
• Equity Funds:
• Multi Cap Fund
• Large Cap Fund
• Large and Mid-Cap Fund
• Mid Cap Fund
• Small Cap Fund
• Dividend Yield Fund
• Value Fund or Contra Fund
• Focused Fund
• Sectoral/Thematic Fund
• Equity Linked Savings Scheme
• Flexi Cap Fund
• Debt Funds
• Overnight Fund
• Liquid Fund
• Ultra-Short Duration Fund
• Low Duration Fund
• Money Market Fund
• Short Duration Fund
• Medium Duration Fund
• Medium to Long Duration Fund
• Long Duration Fund
• Dynamic Bond
• Corporate Bond Fund
• Credit Risk Fund
• Banking and PSU Fund
• Gilt Fund
• Gilt Fund with 10-year Constant Duration
• Floater Fund
• Hybrid Funds
• Conservative Hybrid Fund
• Balanced Hybrid or Aggressive Hybrid Fund
• Dynamic Asset Allocation or Balanced Advantage
• Multi Asset Allocation
• Arbitrage Fund
• Equity Savings
• Solution Oriented Schemes
• Retirement Fund
• Children’s Fund
• Other Schemes
• Index Funds/Exchange Traded Fund
• Fund of Funds (Overseas/Domestic)
On the basis of flexibility of redemption:
• Open-ended Funds: These funds do not have a fixed date of redemption. Generally, they are open for subscription and redemption throughout. From the investors' perspective, they are much more liquid than closed-ended funds. Investors are permitted to join or withdraw from the fund anytime.
• Close-ended Funds: These funds are open initially for entry during the New Fund Offer (NFO) period and thereafter closed for entry as well as exit. These funds have a fixed date of redemption and can be redeemed only on the fixed date of redemption.
• Interval funds: These funds combine the features of both open-ended and close-ended funds wherein the fund is close-ended for a specific period and open-ended thereafter. Some funds allow fresh subscriptions and redemption at fixed times every year (say every six months) in order to reduce the administrative aspects of daily entry or exit, yet providing reasonable liquidity.
On the basis of management of portfolio:
• Active Funds: Actively managed funds are funds where the fund manager has the flexibility to choose the investment portfolio, within the broad parameters of the investment objective of the scheme. Since this increases the role of the fund manager, the expenses for running the fund turns out to be higher.
• Passive Funds: Passive funds invest on the basis of a specified index; whose performance it seeks to track. The proportion of each share in the scheme’s portfolio would also be the same as the weightage assigned to the share in the respective index. Since the portfolio is determined by the index itself, the fund manager has no role in deciding on investments. Therefore, these schemes have low running costs.
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