MUTUAL FUND SCHEMES BASED ON INVESTMENT OBJECTIVE - tradecareer

 MUTUAL FUND SCHEMES BASED ON INVESTMENT OBJECTIVE

Income Oriented Mutual Fund: These funds offer a fixed income to investors and it has 

lower risk as compared to growth funds. Under this scheme, the Asset Management 

Company invests funds income oriented schemes like Bonds, Debentures, Government 

Bonds & securities and commercial papers.

Features

(i) These schemes are generally have lesser risk as compared to Growth schemes.

(ii) These schemes give fixed income.

Growth oriented Mutual Fund: These funds offer capital appreciation over a period. Under 

this scheme, the Asset Management Company invests funds in the equity shares which 

have significant growth potential. Despite good return under this mutual fund scheme, there 

is no assurance or guarantee of return. In other words, it is a scheme which has high risk 

and high return.

                                                                 

Features:

(i) High risk and High return.

(ii) No Guarantee or assurance for return.

(iii) The objective of this fund to get High capital appreciation.

Hybrid Mutual Funds/Balanced Mutual Funds: These funds have features of income 

oriented funds and growth oriented funds.

Example: HDFC Prudence, an equity oriented hybrid fund under this scheme, the AMC

invests the entire funds in types of securities:

(i) Equity shares, and

(ii) Bonds & Fixed income oriented instruments.

High Growth Schemes: These funds primarily invest in high risk and high return volatile 

securities in the market and induce the investors with a high degree of capital appreciation.

Capital Protection Oriented Scheme: It is a scheme which protects the capital invested in 

the mutual fund through suitable orientation of portfolio structure.

Real Estate Funds: These are close-ended mutual funds which invest predominantly in real 

estate and properties.

Off-shore Funds: Such funds invest in securities of foreign companies with RBI permission.

Leverage Funds: Such funds, also known as borrowed funds, increase the size and value 

of portfolio and offer benefits to members from out of the excess of gains over cost of 

borrowed funds. They tend to indulge in speculative trading and risky investments.

                                                                  

Hedge Funds: They employ their funds for speculative trading, i.e. for buying shares whose 

prices are likely to rise and for selling shares whose prices are likely to fall.

Fund of Funds: They invest only in units of other mutual funds. Such funds do not operate 

at present in India.

New Direction Funds: They invest in companies engaged in scientific and technological 

research such as birth control, anti-pollution, oceanography etc.

Exchange Trade Funds (ETFs): These are a new variety of mutual funds that first 

introduced in 1993. ETFs are sometimes described as mere "tax efficient" than traditional 

equity mutual funds, since in recent years, some large ETFs have made smaller distribution 

of realized and taxable capital gains than most mutual funds.

Money Market Mutual Funds: These funds invest in short-term debt securities in the 

money market like certificates of deposits, commercial papers, government treasury bills etc. 

Owing to their large size, the funds normally get a higher yield on such short-term 

investments than an individual investor.

Infrastructure Debt Fund: They invest primarily in the debt securities or securitized debt 

investment of infrastructure companies.