Mutual funds are nothing but professionally managed investment schemes. They represent a plethora of funds that are professionally managed by mutual fund managers.
Asset management companies manage mutual funds. These companies collect funds from a group of investors who invest these funds in bonds, stocks, and securities.
Listed below are the best and the trending mutual fund investment schemes.
The best types of mutual funds are:
- Debt funds:
A debt fund is that mutual fund that invests fixed income securities. In these types of funds, the money is invested in short-term bonds, long-term bonds, securitised funds, floating rate debt and money making instruments.
- Equity funds:
An equity fund is that type of mutual fund that mainly invests money in stocks.
- Equity-linked savings schemes:
This is also an equity mutual fund, but it is close funded in nature. This fund helps save the taxes and grows wealth. Under tax deductions as per the income tax act under section 80C, investors of this scheme can enjoy tax saving.
- Diversified funds:
This category of mutual funds allows the investors to invest the money in diverse sectors or industries. It helps investors spread their investments in various sectors of the market.
- Gilt funds:
Gilt funds allocate money to securities which are offered by the state or the central government. There is no default risks involved in gilt funds.
- Liquid mutual fund:
Liquid mutual funds are those investment plans that allocate the funds primarily to money market instruments like treasury bills, term-deposits, certificate of deposits commercial papers etc. The maturity period of these funds is comparatively low.
These are only a few out of many preferred and trending mutual fund investments around India. Mutual funds are very crucial, and one should be very careful while choosing their mutual fund investment plan.