11 Replies to “What are the different types of Mutual funds?”



  1. There are many many types of mutual funds such as Gold Funds, TAX Saving Funds, Top up, Dynamic and Discovery Funds, Index, Equity.





  2. Types of mutual funds are:

    1. Value stocks: Stocks from firms with relative low Price to Earning (P/E) Ratio, usually pay good dividends. The investor is looking for income rather than capital gains.
    2. Growth stock: Stocks from firms with higher low Price to Earning (P/E) Ratio, usually pay small dividends. The investor is looking for capital gains rather than income.
    3. Based on company size, large, mid, and small cap: Stocks from firms with various asset levels such as over $ 2 Billion for large; in between $ 2 and $ 1 Billion for mid and below $ 1 Billion for small.
    4. Income stock: The investor is looking for income which usually come from dividends or interest. This fund may include bonds which pay high dividends.
    5. Index funds: The number and ratios or securities are maintained by the fund manager to mimic the Index fund it is following.
    6. Enhanced index: This is an index fund which has been modified by either adding value or reducing volatility through selective stock-picking.
    7. Stock market sector: The securities in this fund are chosen from a particular marked sector such as Aerospace, retail, utilities, etc.
    8. Defensive stock: The securities in this fund are chosen from a stock which usually is not impacted by economic down turns.
    9. International: Stocks from international firms.
    10. Real estate: Stocks from firms involved in real estate such as builder, supplier, architects and engineers, financial lenders, etc.
    11. Socially responsible: This fund would invests according to non-economic guidelines. Funds may make investments based on such issues as environmental responsibility, human rights, or religious views.
    12. Balanced funds: The investor may wish to balance his risk between various sectors such as asset size, income or growth.
    13. Tax efficient: Aims to minimize tax bills, such as keeping turnover levels low or shying away from companies that provide dividends, which are regular payouts in cash or stock that are taxable in the year that they are received.
    14. Convertible: Bonds or Preferred stock which may be converted into common stock.
    15. Junk bond: Bonds which pay higher that market interest, but carry higher risk for failure.
    16. Mutual funds of mutual funds: This funds that specializes in buying shares in other mutual funds rather than individual securities.
    17. Closed end: This fund has a fixed number of shares.
    18. Exchange traded funds (ETFs): Baskets of securities (stocks or bonds) that track highly recognized indexes.


  3. It will be better if u understand what is a mutual fund before going into details of different types of mutual funds. So, I would advise u to go thru websites like www. valueresearchonline.com or http://www.moneycontrol.com-MF section which would give you a deep insight into MFs.




  4. Major Types of Mutual Funds

    Money market mutual funds: Money market mutual funds invest primarily in short-term, liquid financial assets, such as commercial paper and U.S. Treasury bills. The goal of these funds is to obtain a higher return (after fees and expenses) than traditional savings or checking accounts.

    Stock mutual funds: Stock mutual funds invest primarily in common stocks listed on the major securities exchanges discussed in Investments 5: Stock Basics. Each type of stock mutual fund has a particular emphasis or objective, such as large-capitalization stocks, small-capitalization stocks, value stocks, growth stocks, and so on.

    Bond mutual funds: Bond mutual funds invest primarily in the bonds offered by companies or institutions. Each of these bond mutual funds has a particular emphasis or objective: corporate bonds, government bonds, municipal bonds, agency bonds, and so on. Most of these funds have specific maturity objectives, which relate to the average maturity of the bonds in the fund’s portfolio. Bond mutual funds can either be taxable or tax-free, depending on the types of bonds the fund owns





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