Types of Mutual Funds

Have you been considering making an investment in a mutual fund? If so, you will likely want to get to know about the different types of mutual funds in India. Being informed and knowing what options are available can help you choose the one that best suits your investment needs and goals.

Open-Ended Funds

This is a type of fund where units are open for redemption or purchase throughout the year. Basically, with this type of investment, you can keep investing as long as you want. There aren’t any limits regarding the amount that can be invested into the fund, either.

An open-ended fund is also actively managed (in most cases). This means that the fund manager is going to determine where investments are made.

Close-Ended Funds

Another one of the types of mutual funds in India is the close-ended fund. With this, units are only able to be purchased during the offer period. They are able to be redeemed at a set maturity date. Unlike the open-ended funds, after the stocks or units have been purchased, they are not able to be resold into the mutual fund but have to be sold for the current price of the shares, through the stock market.

Interval Funds

This is a fund that has the features of both open- and close-ended funds. This is because it is opened for the repurchasing of shares at different times during the tenure of the fund.

As you can see, there are several types of mutual funds in India. It is a good idea to consider each one, and the pros and cons of each carefully to determine the type of investment you would like to make.

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