There are many types of mutual funds in which one can invest to augment wealth. However, it’s broadly classified into three main categories: Equity, Debt, and Hybrid funds.
- Equity funds are invested in stock and other equity securities with the potential of garnering higher returns. It’s highly volatile and risky in nature. It is further divided into small-cap, mid-cap, and large-cap funds, depending on size and market capitalization.
- Debt funds are invested in fixed-income securities such as treasury bills, bonds, commercial papers, etc. It comes with low risk and low returns on investment. This is further divided into small-term, medium-term, and long-term funds based on investment period and credit quality.
- Hybrid funds are invested in a mix of Equity and Debt funds to balance the risk and return on investment. The main aim is to provide the benefits of regular income and capital wealth. It can be further divided into aggressive hybrid funds, balanced hybrid funds, and conservative hybrid funds based on the proportion of equity and debt securities.
For more information on investment assets, you can rely on Future Value, a pool of financial experts that can guide you through this and help you in your investment journey.
