The Mutual Funds Bouquet
Although Mutual Funds is a single investment vehicle, it encompasses a wide variety of funds. It is often confusing for a new comer to comprehend the 1000+ mutual fund schemes offered by 30+ fund houses (aka Asset Management Companies). In this blog, let us look at the broad classification of these funds. Equity & Equity-oriented Funds - these funds invest 65-90% of their assets (money collected from investors) in equities - i.e stocks of companies listed in the stock exchanges BSE & NSE. Again there could be thematic funds depending on whether they invest in large-cap, mid-cap, small-cap or micro-cap stocks or across sectors such as banking, infrastructure etc. Debt Funds - these funds invest 75-90% of their assets in debt securities. They would choose to invest in a combination of government and corporate bonds, the details of whose allocation is specified in the scheme's SID (Scheme Information Document). Hybrid Funds - these are balanced funds with a 40:60 alloca...