Mutual Funds#
What are Mutual Funds?#
Pooled investments managed by asset management companies for investors.
Types of Mutual Funds#
By Structure
- Open-ended
- Close-ended
- Interval
By Asset Class
- Equity funds
- Debt funds
- Hybrid funds
- Money market funds
By Market Cap
- Large cap
- Mid cap
- Small cap
Investment Methods#
1. Lump Sum
- Single investment
- Dollar cost averaging optional
2. SIP (Systematic Investment Plan)
- Regular periodic investment
- Rupee cost averaging
- Disciplined investing
Benefits#
- Professional management
- Diversification
- Liquidity
- Transparency
- Tax benefits
Risk Factors#
- Market risk
- Credit risk
- Liquidity risk
- Inflation risk
Returns#
- Historical returns 10-15%
- Market linked
- No guaranteed returns
Tax Treatment#
- Equity funds: 10% LTCG (above ₹1 lakh)
- Debt funds: 20% with indexation
- Dividend: Taxable as per slab