Types of Funds

10percentfinance

What are the types of mutual funds available?

There are mainly four types of mutual funds.

Follow ahead to read about a few of them

Equity Mutual Funds

These funds pool money from investors to primarily invest in stocks of publicly traded companies. They offer higher growth potential but come with more volatility. By holding stocks from various companies, they offer diversification, which helps mitigate the risk of any single stock underperforming.

Fixed Income Funds

These funds primarily invest in bonds and other fixed-income securities. These funds provide exposure to assets such as government bonds, corporate bonds, high-yield bonds, or certificates of Deposit (CDs). They aim for a steady income and are generally less volatile than equity funds.

Money Market Funds

Money market funds invest in short-term debt instruments that are highly liquid, like Treasury bills and commercial paper. They have two primary investment components: Cash and short-term debt instruments.

Hybrid Funds

These funds combine features of multiple assets, generally stocks and bonds into a single fund. These funds aim to provide investors with a diversified portfolio which helps in maintaining stability.

Check out blog post to know about more related terms

10percentfinance - Investment Strategies

Arrow