13.
Explanation
In India, there are various types of mutual funds available to investors. Some of the common ones include:
1. Equity Funds: These funds invest primarily in stocks, offering the potential for higher returns but also higher risk.
2. Debt Funds: Debt funds invest in fixed-income securities like bonds and are considered less risky compared to equity funds.
3. Hybrid Funds: Also known as balanced funds, these invest in a mix of both stocks and bonds to provide a balance of returns and risk.
4. Money Market Funds: These funds invest in short-term debt instruments, making them relatively low-risk and suitable for short-term investments.
5. Index Funds: These funds aim to replicate the performance of a specific stock market index, such as the Nifty 50 or Sensex.
6. Sectoral/Thematic Funds: These funds focus on specific sectors or themes, such as technology or healthcare.
7. Tax-saving Funds (ELSS): Equity Linked Savings Schemes offer tax benefits under Section 80C of the Income Tax Act.
8. Liquid Funds: These funds invest in very short-term debt instruments, providing high liquidity and safety of capital.
9. Gilt Funds: Gilt funds invest in government securities, offering lower credit risk but still subject to interest rate risk.
10. Exchange-Traded Funds (ETFs): ETFs are like index funds but trade on stock exchanges, allowing investors to buy and sell them throughout the trading day.
11. Fund of Funds: These funds invest in other mutual funds, providing diversification across different asset classes.
12. International Funds: These funds invest in foreign securities, allowing exposure to global markets.
In conclusion, mutual funds in India come in various types, each with its own investment objectives and risk profiles. Choosing the right mutual fund should depend on your financial goals, risk tolerance, and investment horizon. It’s crucial to diversify your investments and consider seeking professional advice to make informed decisions.