Types of Funds & Investment
Stories and information to help you plan, prepare and protect what matters most.
Mutual Funds are trusts that collect money from a number of investors who share common investment objectives. These trusts are managed by Fund Managers. Further, mutual funds invest this money in equities, bonds, money market instruments and/or other securities. And the income or gains generated from this collective investment is distributed proportionately amongst the investors.
This is done after deducting applicable expenses and levies, by calculating the scheme’s Net Asset Value or NAV. Simply put, the money pooled in by a large number of investors is what makes up Mutual Funds.
Mutual Funds invest in different asset classes. These classes are debt, equity, gold, combination of these, etc. Equity based funds too have a wide range of offerings like diversified equity funds, sectoral funds, etc. Similarly, debt funds have investments in central government bonds, state government bonds, etc.The size of Mutual Fund Industry in India is 28 Lakh Crores approx.
Nearly 4000 crores is invested every month via Systematic Investment Plans (SIP), an indicator of the trust and popularity of Mutual Funds in India.
Alternate Inverstments Funds
Alternative Investment Funds are an investment avenue to pool in funds for investing in private equity, real estate or to hedge funds. AIFs may be established or incorporated as a company, trust or other bodies corporate (including limited liability partnerships).
Categories of AIF
Category I – AIF that invest in start-ups or social venture funds, infrastructure funds, SME funds, and so on. They are often considered socially viable or economically desirable for the government or regulators.
Category II – Funds that do not leverage or undertake to borrow other than to meet the operational requirement which does not fall under Categories I and III. Typically Private Equity Funds fall in this category.
Category III – Funds that undertake diverse or complex trading strategies including investment in listed or unlisted derivatives. Typically Hedge Funds fall in this category. Only close-ended funds are in Category I and II AIFs while open-ended funds are in Category III.
Deposit and Bond
Company Fixed Deposit (corporate FD) is a term deposit which is held over fixed period at fixed rates of interest. Company Fixed Deposits are offered by Financial and Non-Banking financial companies (NBFCs). The maturities of various company fixed deposits can range from a few months to a few years. Choose from multiple company fixed deposits options varying in tenures, interest rates and institutions to suit your investment needs. Avail stable returns and benefit from much reduced volatility through a wide range of AAA and AA-rated Company Fixed Deposits.
Portfolio Management Services
Portfolio Management Services offer a customised investment portfolio in equity or debt asset classes. The objective is to generate superior returns. Professional fund managers provide these services.
There are two types of PMS
1. Discretionary PMS: It is Discretionary when the fund manager is empowered to take decisions on behalf of the investor.
2. Non-Discretionary PMS: It is Non- Discretionary when the fund manager only offers suggestions to the investor, and the investor takes the final decision.