Types of mutual funds
Mutual funds are of various types such as Open-ended mutual funds, Close-ended mutual funds, Growth-oriented funds, Income-oriented funds, Specialized funds, Domestic funds, Off-shore funds etc. Lets have a look at some of these types.
1. Open-ended mutual fund
Open ended type of mutual funds sells units to public. These mutual funds can also repurchase the units. There is no fixed maturity period for the open ended type mutual funds. When the Initial public offer period is over, it is opened again for another period of 30 days as an open-ended scheme from the date of closure of the IPO. The units are available for investors for repurchasing at NAV or net value related prices, as decided by the mutual fund.
Example: Unit Trust of India’s Growth sector funds.
Net Asset Value (NAV):
The net asset value is asset-liabilities on the day of valuation.
NAV = Net asset of the scheme / Number of units outstanding
List of Diversified Funds – Here you can find a list of diversified mutual funds that are both open ended and closed ended types with their current NAV Value.
2. Close ended mutual funds
A close ended mutual fund is open for a fixed period and whatever money invested forms the basis for investment in various securities. Close ended types have fixed maturity period anywhere from 2 to 15 years. One can invest in the scheme at the time of initial issue as it is open for a maximum period of 45 days. Thereafter, these schemes cannot issue new units. The investors cannot buy units directly from the mutual fund agency when the period of issue is over.
Latest news on Close Ended Mutual fund – Here you can find latest news about close ended mutual funds
Category wise mutual fund companies – Here you can find category-wise list of companies offering closed end mutual funds.
3. Growth-oriented mutual funds
It has the object of capital appreciation through investment in equity shares. Normally, investment is done in equity shares of such companies which have high growth potential.
Examples: Software companies, petrol chemical companies and MNCs will come under this category.
4. Income -oriented mutual funds
The main object of this type of fund is to provide regular income to the investor. So, the mutual fund would wish to invest the public money raised in bonds, debentures and other debt related instruments. In some cases, they may even invest in equity shares of companies with high dividend pay outs.
Example: VTI’s Monthly income fund.
List of Income oriented mutual funds – Here you can find a list of Income oriented mutual funds.
5. Specialized mutual fund
Here, the mutual fund will be investing the money of the investors in a particular industry such as steel, or petroleum so that such industries will grow rapidly.
6. Domestic mutual fund
When the mutual fund mobilize savings from a particular geographic location like a country or region, it is known as domestic mutual fund. Example: UTI Mutual fund, LIC Mutual Fund and SBI Mutual Fund, etc.
7. Off shore mutual fund
The objective of launching off-shore mutual fund is to attract foreign capital for investment in the country of the issuing company. Due to these mutual funds, there is cross border fund flow. Off-shore mutual funds open up the capital market to the foreign investors and to global portfolio investments.