What are the Types of Mutual Funds?

When it comes to the top investment instruments, Mutual Funds are among the most popular options. Over recent years, investments in Mutual Funds have produced satisfactory returns, and hence, it is one of the most popular choices among investors from all around the globe. Paragraphs underneath shall discuss the various kinds of Mutual Funds that you are likely to find in the investment market.

Open-Ended Mutual Funds

Speaking about the various kinds of Mutual Funds available in the investment market, the Open-Ended Mutual Funds covers a major part of the stake. For this kind of mutual funds, an investor can buy or sell the mutual funds at any time he/she wants, as such funds don’t come with any fixed maturity dates. Carrying out mutual fund marketing also becomes easy for this kind of funds. The open-ended Mutual funds majorly opt for the debt instruments as the choice for investment.  These Mutual funds are suitable for those investors who are happy with a low rate of capital appreciation to escape the extent of higher risks. This would be the ideal pick, for you are looking for a short term investment plan. Investing in these funds, you can develop a channel for steady regular income.

Equity Funds

This is a short term investment plan that comes with the potential for high profits, clubbed with equally high investment risk. This is the perfect investment option for young investors, starting the investment regime at a very early age. Though these funds involve a great deal of risk in the short term. However, long term investments in these funds can ensure a significant capital appreciation.

Closed-Ended Mutual Funds

As you can make it from the name itself, these mutual funds always come with a fixed date of maturity, and the most striking feature of these funds is that you can invest in these instruments, exclusively during the initial launch time. These finds are subcategorized into capital protection plans and fixed maturity plans. The former plan is meant to protect the capital, and it produces returns at a fair rate. For the second scheme, as you can make it from the name, this plan will come with a fixed date for maturity.

In addition, there is the Interval fund that blends the features of the closed and the open-end plans, and investing in these plans, investors will retain the rights to buy or sell as many units, at intervals specified previously.

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