Different Types of Mutual Funds : Part 1 - Franklin Templeton India

Types of Mutual Funds, Part One, Okay, let's say you want to travel from Mumbai to New Delhi, which is a long journey, so your travel agent gives you options of

different

modes of transport that you can use to reach there, from so that it tells you how long you have been in the room. and flexibility of each mode for you and now it's up to you to decide which mode best suits the comfort of your pocket diamond. Achieving your financial goal is pretty similar once you know your end goal, how long you have to reach a goal, what level of risk you are willing to take on and what flexibility you design in terms of liquidity, there are many ways to get there, but obviously You want to find the most optimal and suitable option and the only way to do that is to understand the

different

types

of

mutual

funds

that are available in the market, so let's discuss the different

types

of

mutual

fund schemes to simplify this.

If an investor's biggest concern is liquidity, then it is best to consider mutual

funds

classified into two broad categories: open-ended and closed-ended, while the fund management principles in the two will be similar the operating characteristic of liquidity is different think in the way you save your money in your savings bank account you can deposit and withdraw any amount and the account remains active even after withdrawing some money in the other On the other hand, the fixed deposit account you open needs to invest a certain amount for a certain period of time and you may not be able to withdraw a small amount from Midway without incurring a charge or, in most cases, canceling the same, similarly, the mutual account opened The fund is like a savings bank account and the closed one is like a fixed deposit, exactly an investor can start investing in an open mutual fund scheme by investing a stipulated minimum amount and opt for additional transactions like additional investments, redemption transfers, etc., any number.

In many cases it is as easy to operate as a savings account. In comparison, a closed-end fund operates like a fixed deposit, making it much less liquid or convenient. The scheme remains a trade for a certain period of time after which it expires and the money is returned. For the investor, another difference between the two types of funds has to do with the way an investor buys and sells. The two closed-end funds must be listed on the stock exchanges from where they are bought and sold, in addition to the market price of the shares. Closed-end funds are typically offered at a discount to the prevailing sailing value, that's more because you're close by and fun units that can only be sold through stock exchanges before maturity, you have to do it in the format d-mat, remember.

You can retain the right to hold the units in the statement form, however, you will not be able to transact through stock exchanges, just wait till the maturity of the plan, but wait, there is a third type of mutual funds. Interval funds that combine the features of open and closed-end funds and their schemes, these funds are open for investment or redemption during predetermined intervals, just as you would evaluate which mode of transportation to choose for your trip depending on the rigidity of your travel plan. You can evaluate between the three types of mutual funds here based on liquidity: What best suits your goal If liquidity is not your biggest concern, there are more mutual fund classifications you can refer to, some based on asset type in which they invest, such as debt or fixed income funds that invest in fixed income securities such as Treasury bills, government securities, bonds and securitized debt, there are equity funds that invest primarily in stocks or companies and equity-related investments and Then there are hybrid funds that are a mix of debt and equity.

We have separate videos explaining in detail the different options available within. these types of funds and it does not end here. Watch

part

2 of this video to see more types of mutual funds based on the way the schemes are managed and other new age mutual fund schemes. It may seem like a lot, but it's simpler than you. Thinking about and understanding the different types of mutual funds is key to choosing the right one for you. We hope you enjoyed watching this video. See more and we will help you learn about different investment concepts. You can also write to us with your comments at Editor's Templeton dot-com mutual fund investments are subject to market risks.

Please read all plan-related documents carefully.