We all save to meet our budgetary needs. While saving can use as emergency money, on the other hand, it also protects you from taking a loan route. A man's financial objects are retirement, children's wedding, holidays, buying a house, and buying a big car or starting their business. They require money and time to complete them. If you give 5 to 10 years for it, then it will benefit you. According to Ajit Menon, CEO, PGIM India Mutual Fund, there is a necessity to invest in different mutual funds to achieve all kinds of goals. Although mutual funds are of seven types, the highest discussion is only five types of funds. These funds are equity funds, balanced funds, index funds, debt funds, money market funds, gilt funds, and liquid funds.
Equity fund is a mutual fund that invests primarily in stocks. It can be operated actively or inactive (index funds). Equity funds are also known as stock funds. Stock mutual funds are classified according to the investment style of holdings, mainly in company size, portfolio, and geography.
This fund is considered to be the most secure fund. The government, the government, is putting all the money taken from the company investors into government schemes. Since there is a backup of the government, there is no risk of sinking money.
The balance fund
The balanced fund is also known as hybrid funds. It is a common stock, bond, and short-term bond. This fund reduces risk and guarantees the security of most invested capital. In this way, you can say that this fund is profitable. There are examples of aggressive balance funds, conservative balance funds, pension funds, child plans, and monthly income schemes, etc.
Under these schemes, money is mainly invested in short-term means. For example, in T bills, and CP, etc. This fund is known for giving good returns on short-time investments. The growth fund is trying to get the maximum benefit with the help of this fund. It is invested in companies that make good growth in the market, but the risk in this fund is high.
Money Market Fund
These funds invest in short-term fixed-income securities such as government bonds, treasury bills, bankers' acceptance, commercial papers, and deposit certificates. These are generally a safe investment, but it receives slightly lower returns than other types of mutual funds. This fund is secure, and it is for those who also want to benefit from the instant investment.
While equity mutual funds invest in public-listed companies, debt funds invest in fixed-income securities of government and companies. These include corporate bonds, government securities, treasury bills, money market instruments, and many other types of debt securities. Investing in the equity of a company like a share is to buy a stake for the growth of that company. But when you buy a debt fund, you give a loan to the issuing institution. The government and private companies issue bills and bonds to get loans to run their various programs.
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