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For investors, regardless of common misconceptions, there are multiple market instruments to choose from. No matter what type of investor you are, there is bound to be a type of investment that will fit your bill. Click here
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INTRODUCTION • For investors, regardless of common misconceptions, there are multiple market instruments to choose from. • No matter what type of investor you are, there is bound to be a type of investment that will fit your bill. • Each mutual fund has a different risk profile and the rewards each offer are also variable.
INTRODUCTION • One important thing you should keep in mind when it comes to investments is that the higher the returns, the larger the risk you would have to bear. • Hence, when you are choosing a particular type of mutual fund, be sure to assess the risk portfolio as well. • If you are a new investor or are looking to branch out into a different category of mutual funds, here are the mutual fund types you can choose from:
Equity Funds • These are also known as growth funds. • These funds invest in equity shares and are thus known as equity funds. . • Keep in mind that equity investments offer long term benefits. • Thus, while determining if you want to invest in these funds, keep in mind that these investments are best suited for long-term growth. • They are also high risk mutual funds.
Debt Funds • These funds primarily invest in debt funds or fixed income instruments such as government bonds, securities, debentures etc. • These are best suited for investors who are looking to invest for the medium or long-term benefits. • They should be risk-averse and seeking a steady income.
Tax Saving Funds • – These funds offer tax benefits under the Income Tax Act of 1961. • They offer tax rebates under Section 80C of the Income Tax Act. • These are best suited for investors seeking tax rebates for long-term growth.
Diversified Funds • You might have heard of the necessity to diversify your portfolio, with diversified funds you can do just that. • These funds invest in funds across the market, sectors and market capitalisation. • It is best suited for investors who do not want to limit themselves to a particular sector.
Balanced Funds • For those investors who enjoy the best of both world, balanced funds are appropriate. • These funds invest in both equity funds as well as debt funds/fixed income instruments. • This way it offers long term growth as well as a steady income..