Types of Mutual Funds in India

Published : 22 August 2023

By : Sachin Gupta

Mutual funds are divided into different categories based on the purpose they serve. 

MFs based on risk undertaking

This can be divided into  i) low-risk funds  ii) moderate risk funds and  iii) high-risk funds. 

MFs based on investment goals

There are two subcategories of these funds  i) growth funds (reinvest the returns)  ii) dividend funds (distribute it to investors). 

MFs based on the structure 

This is more on the flexibility side of withdrawing funds  i)open-ended funds  ii) close-ended funds.

MFs based on asset class

This indicates where a particular mutual fund invests in i) equity funds  ii) debt funds  iii) hybrid funds

MFs based on portfolio management

There are two types of MFs under this category  i) active funds  ii) passive funds. 

MFs based on different specialties 

These mutual funds are unique in nature and require careful considerations: i) index funds  ii) sectoral funds  iii) thematic funds iv) international funds and fund of funds  v) exchange-traded funds  vi) balance advantage funds, and more.