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There are a lot of mutual fund schemes prevalent in the market. An investor should be aware of the scheme before investing his hard earned money in the scheme.

I have given hereunder a snapshot of the various schemes which will be of immense help to an investor and will help in choosing the scheme that suits him best.

Mutual Fund Type

Objective

Risk

Investment Portfolio

Who should Invest

Investment Horizon

Money Market

Liquidity + Moderate Income + Reservation of Capital

Negligible

Treasury Bills, Certificate of Deposits, Commercial Papers, Call Money

Those who park their funds in current accounts or short-term bank deposits

2 days – 3 weeks

Short-term Funds (Floating-short-term)

Liquidity + Moderate Income

Little Interest Rate

Call Money, Commercial Papers, Treasury Bills, CDs, Short-term Government securities

Those with surplus short-term funds

3 weeks – 3 months

Bond Funds (Floating-Long-Term)

Regular Income

Credit Risk & Interest Rate Risk

Predominantly Debentures, Government Securities, Corporate Bonds

Salaried & conservative investors

More than 9 -12 months

Gilt Funds

Security & Income

Interest Rate Risk

Government Securities

Salaried & conservative investors

12 months & more

Equity Funds

Long – term Capital Appreciation

High Risk

Stocks

Aggressive investors with long term outlook

3 years plus

Index Funds

To generate returns that are commensurate with returns of respective indices

NAV varies with index performance

Portfolio indices like BSE, NIFTY etc

Aggressive investors

3 years plus

Balanced Funds

Growth & Regular Income

Capital Market Risk and Interest Risk

Balanced ratio of equity and debt funds to ensure higher returns at lower risk

Moderate & aggressive investors

2 years plus

HAPPY INVESTING

The author is a MBA (Finance), M. Com (Finance) and working as internal auditor with a leading manufacturing concern.

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Category Shares & Stock, Other Articles by - CA Siddhartha Bhardwaj 



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