Things to understand before investing in Mutual Funds
Things to understand before investing in Mutual Funds How does Mutual Fund work? What are the types of Mutual Fund? There are multiple types of mutual funds but for simplicity, there are 3 types of funds - Equity MF - Higher risk - Higher returns Large Cap - less risk and less returns Mid Cap - medium risk and better returns than large-cap funds Small-Cap - high risk and high returns Sector Fund Diversified Equity Fund Dividend Yield Schemes ELSS - 3yr locking, Tax saving in Section 80C Thematic Fund - Like Rural development, eCommerce, Housing, etc Debt MF - Moderate or less risk - Less returns Gilt Funds - invests in government securities Junk Bond Schemes - investment in risky bonds but high return. Fixed Maturity Plans Liquid Funds - like Bank FD but you can withdraw money anytime. Hybrid MF - Invest in Equity and Bonds both Monthly income plan (MIP) - 60-90% ...