Types Of Mutual Funds Part I

Hi! It’s me again—Mutual Fund. In the last article, you may have understood various reasons why to choose me for your investment needs. Now I will take you through my family members. So get ready for a long list.

Market regulator Securities and Exchange Board of India has categorised our family into five main categories, viz. equity schemes, debt schemes, hybrid schemes, solutionoriented schemes and other schemes. So, in this article, my family members coming under the equity schemes category will be introducing themselves, and in the forthcoming articles, family members in other categories will also introduce themselves.



EQUITY SCHEMES
Within this category, I have 10 family members. The primary ways in which they are differentiated is the type of stocks they invest in. So, now they will introduce themselves one by one.

Large-Cap Fund :
Hey! I am large-cap fund and I have minimum 80 per cent of my assets invested in equity and equity-related instruments of large-cap companies. I have to invest minimum 80 per cent of the corpus in any of the first 100 companies in terms of full market capitalisation. 

Mid-Cap Fund :
Hi! I am mid-cap fund and I have a minimum 65 per cent of assets invested in equity and equity related instruments of mid-cap companies. I have to invest 65 per cent of my corpus into companies ranking from 101 to 250 in terms of full market capitalisation.

Small-Cap Fund : Hey guys! I am small-cap fund and I have minimum 65 per cent of assets invested in equity and equity-related instruments of small-cap companies. I have to invest 65 per cent of my corpus in companies ranking 251 and onwards in terms of full market capitalisation.

Large-Cap & Mid-Cap Fund : Hello! We have even a twins in the family. We invest minimum 35 per cent of the assets in equity and equity-related instruments of large-cap companies and minimum 35 per cent of the assets in equity and equity-related instruments of mid-cap companies. In case of large-cap, we have to invest minimum 35 per cent in the first 100 companies in terms of full market capitalisation, and in case of mid-cap, we have to invest minimum 35 per cent in companies ranking from 101 to 250 in terms of full market capitalisation.

Multi-Cap Fund : Hi! I am multi-cap fund and I have to invest a minimum 65 per cent of the assets in equity and equity-related instruments. I am free to invest across market capitalisation, be it large-cap, mid-cap or small-cap.

This is the fourth article of the knowledge series sponsored by Sundaram Asset Management Company, which will cover various topics important for your financial well-being. 

Dividend Yield Fund : Hello everyone! I am dividend yield fund and I have minimum 65 per cent of assets predominantly invested in dividend yielding stocks. I am not restricted in terms of market capitalisation.

Value Fund/Contra Fund : There is twist in our family structure. I have two children, value and contra, however only one is allowed to be present. AMCs (Asset Management Companies) can choose to have only one of the two, i.e. either a value fund or a contra fund. Value fund have minimum 65 per cent of assets invested in equity and equity-related instruments and the fund follows value investing strategy. On the other hand, contra fund also have minimum 65 per cent of assets invested in equity and equity-related instruments and the fund follows contrarian investment strategy.



Focused Fund : Hi! I'm focused fund. I have minimum 65 per cent of assets invested in equity and equity-related instruments and I have a restriction that I can invest in maximum of 30 stocks.

Sectoral/Thematic Fund : I am a sector fund and my better-half is thematic fund. I have minimum 80 per cent of my assets invested in equity and equity-related instruments of a particular sector and my better-half has 80 per cent of assets invested in equity and equity-related instruments of a particular theme.

ELSS : Hi! I am Equity-Linked Savings Scheme, or popularly known as ELSS. I have minimum 80 per cent of my assets invested in equity and equity-related instruments. I am free to invest across market capitalisation, but I come with a lock-in period of three years. However, the good news is that you can avail tax deduction under section 80C up to Rs. 1.5 lakh by investing in me.

All my family members have introduced themselves. Hope now you would be clear about the traits of my family members that come under equity schemes. I am sure this will help you in making the right investment decision and to understand which of my family members suits you better.