Mutual Funds

Definition: A mutual fund is an investment vehicle that pools money from many investors and invests it in stocks, bonds, short-term money-market instruments, other securities, or assets.
Registration: All mutual funds are required to be registered with SEBI before launching any scheme.

Categorization of Mutual Funds

Mutual funds can be categorized based on their investment objectives to cater to different types of investors, including risk-averse, moderate, and aggressive investors.
The categorization of mutual funds includes:
- Equity Schemes: Principally invest in stocks/equities.
- Debt Schemes: Principally invest in fixed income securities like bonds and treasury bills.
- Hybrid Schemes: Invest in two or more asset classes, such as equities, fixed income, and cash.
- Solution Oriented Schemes: Invest according to individual goals, like retirement and child planning.
- Other Schemes: Include Index Funds, Sectoral funds, and other types of schemes.