Compare the key attributes, optimal durations, and risk levels of major Indian mutual fund structures.
Liquid funds are debt funds that lend to companies for a period of up to 91 days. These are the safest funds amongst all the mutual fund categories, owing to their extremely low lending duration.
Debt funds invest in high-quality fixed-income securities like treasury bills, corporate bonds, and government debt, offering stability and predictable income.
Arbitrage funds are hybrid mutual funds that generate returns by using the strategy of simultaneously buying and selling of securities in different markets to exploit price differentials.
These funds invest in a mix of stocks and FD-like instruments. They dynamically shift asset allocation based on market valuations to optimize returns and cushion risks.
Balanced funds invest an equal amount in stocks and FD-like debt instruments, providing a highly balanced portfolio that combines growth potential with structural stability.
Hybrid funds invest primarily in stocks with a smaller allocation to FD-like instruments. Diversifying assets reduces volatility relative to pure equity funds.
A diversified equity fund invests in businesses across various market capitalizations and sectors to spread out risks. Offered by ULIPs, mutual funds, and other investment firms.
Multi cap equity funds invest across companies of all sizes (large, mid, and small) and sectors, shifting weights dynamically based on market opportunities.
Large cap mutual funds invest primarily in the top 100 blue-chip companies of India. These are established market leaders and household names.
These funds invest in India's top 200 companies, blending the stability of large-cap blue-chips with the high-growth aggression of emerging mid-sized challengers.
Mid cap mutual funds invest in medium-sized enterprises. These fast-growing companies are at a developmental stage today where current market giants were a few years ago.
Small cap funds invest in early-stage, smaller companies beyond the top 250 listings. While they hold potential for massive gains, they are highly volatile.
Sectoral funds invest strictly in a single industry (e.g., IT, Banking, Pharma). This lack of diversification makes them high-risk, high-return options.
Thematic funds invest in multiple sectors united by a common theme (e.g., Infrastructure, ESG, Consumption). They offer slightly broader diversification than sectoral funds.
These funds invest in equities listed outside India. They allow local investors to get exposure to global giants like Amazon, Apple, Microsoft, and Alphabet.
ELSS is an equity mutual fund offering tax deduction benefits under Section 80C of the Income Tax Act up to a limit of ₹1.5 Lakhs per financial year.