Mutual funds come in many forms. Knowing the broad categories helps you ask better questions before you invest.
Equity funds
Equity funds invest mainly in company shares. They aim for long-term growth but can be volatile in the short run. They are usually considered for goals with a longer horizon.
Debt funds
Debt funds invest in bonds and other fixed-income instruments. They are generally less volatile than equity funds, but they are not risk free. Credit risk and interest-rate risk can both affect returns.
Hybrid funds
Hybrid funds combine equity and debt in one scheme, with the mix depending on the fund's objective. They can offer a built-in balance, though each fund's approach and risk differ.
Index funds
Index funds aim to track a market index rather than beat it. They typically involve lower costs, and their performance follows the index, up or down.
What to check before investing
Look at the fund's objective, risk level, costs, the portfolio it holds and how long you intend to stay invested. Read the scheme documents carefully.
Mutual fund investments are subject to market risks. This article is general education and is not personalised financial advice.
Important information
This article is for general education only. It does not consider your personal objectives, financial situation or needs, and is not investment, tax or legal advice. Investments are subject to market risks. Read our risk disclosures.