4 types of Mutual Funds as per Asset Class!
Channel: Shoonya by Finvasia
Date: 2023-01-16

You must have heard a lot about Equity and Debt funds. But do you know two more types of Mutual Funds that belong to the same asset class?

Have a look here:

Equity Funds
-These are funds that invest in equity stocks/shares of companies.
-These are considered high-risk funds, but they tend to provide high returns.
-Equity funds can include speciality funds like infrastructure, fast-moving consumer goods, banking, etc.

Debt Funds
-These are funds that invest in debt instruments, e.g., company debentures, government bonds, and other fixed-income assets.
-They are considered safe investments and provide fixed returns.
-These funds do not deduct tax at the source, so if the investment's earnings are more than Rs. 10,000, the investor is liable to pay the tax on it himself.

Money Market Funds
-These are funds that invest in liquid instruments, e.g., T-Bills, CPs, etc.
-They are considered safe investments for those who look to invest their surplus funds for immediate but less risky returns.
-Money markets are also referred to as cash markets.

Balanced or Hybrid Funds
-These are funds that invest in a mix of asset classes. 
- Risk and returns are balanced out in this as, in some cases, the proportion of equity is higher than debt, while in others, it is the other way round.

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