TYPES OF MUTUAL FUNDS SCHEMES-

Wide variety of Mutual Fund Schemes exists to cater to the needs such as financial position,
risk tolerance and return expectations etc. The table below gives an overview into the existing
types of schemes in the Industry.

Equity / Growth Fund Liquid Funds

Invest primarily in equity Provide high level of
and equity related liquidity by investing in
instruments. money market and debt
instruments.
Children's Gift Fund Debt/ Income Fund
Children's Gift Fund Invest in money market and
debt instruments and provide
optimum balance of yield, ...

Fixed Maturity Plan

Invest primarily in Debt /
Money Market Instruments
and Government Securities...

Mutual Fund Schemes

1. By Structure
  Open - Ended Schemes
 Close - Ended Schemes
 Interval Schemes

2. By Investment Objective

 Growth Schemes
 Income Schemes
 Balanced Schemes
 Money Market Schemes

3. Other Schemes

 Tax Saving Schemes

 Special Schemes
 Index Schemes
 Sector specific schemes

CLOSED ENDED MUTUAL FUND

A closed-end mutual fund has a set number of shares issued to the public through an initial
public offering. These funds have a stipulated maturity period generally ranging from 3 to 15
years.

The fund is open for subscription only during a specified period. Investors can invest in the
scheme at the time of the initial public issue and thereafter they can buy or sell the units of
the scheme on the stock exchanges where they are listed. nice underwritten, closed-end funds
trade on stock exchanges like stocks or bonds. The market price of closed-end funds is
determined by supply and demand and not by net-asset value (NAV), as is the case in open-
end funds. Usually closed mutual funds trade at discounts to their underlying asset value.

OPEN ENDED MUTUAL FUND

An open-end mutual fund is a fund that does not have a set number of shares. It continues to
sell shares to investors and will buy back shares when investors wish to sell. Units are bought
and sold at their current net asset value.

Open-end funds keep some portion of their assets in short-term and money market securities
to provide available funds for redemptions. A large portion of most open mutual funds is
invested in highly liquid securities, which enables the fund to raise money by selling
securities at prices very close to those used for valuations.

LARGE CAP FUNDS

Large cap funds are those mutual funds, which seek capital appreciation by investing
primarily in stocks of large blue chip companies with above-average prospects for earnings
growth.

Different mutual funds have different criteria for classifying companies as large cap.
Generally, companies with a market capitalization in excess of Rs. 1000 crore are known
large cap companies. Investing in large caps is a lower risk-lower return proposition (vis-à-
vis mid cap stocks), because such companies are usually widely researched and information
is widely available.

MID CAP FUNDS

Mid cap funds are those mutual funds, which invest in small / medium sized companies. As
there is no standard definition classifying companies as small or medium, each mutual fund
has its own classification for small and medium sized companies. Generally, companies with
a market capitalization of up to Rs.500 crores are classified as small. Those companies that
have a market capitalization between Rs. 500 crores and Rs. 1,000 crores are classified as
medium sized.

Big investors like mutual funds and Foreign Institutional Investors are increasingly investing
in mid caps nowadays because the price of large caps has increased substantially. Small / mid
sized companies tend to be under researched thus they present an opportunity to invest in a
company that is yet to be identified by the market. Such companies offer higher growth
potential going forward and therefore an opportunity But mid cap funds are very volatile and
tend to fall like a pack of cards in bad times. So, caution should be exercised while investing
in mid cap mutual funds.