Mutual Fund Type
Objective
Risk
Investment Portfolio
Who should invest
Investment horizon
Money Market
Liquidity + Moderate Income + Reservation of Capital
Negligible
Treasury Bills, Certificate of Deposits, Commercial Papers, Call Money
Those who park their funds in current accounts or short-term bank deposits
2 days - 3 weeks
Short-term Funds (Floating - short-term)
Liquidity + Moderate Income
Little Interest Rate
Call Money, Commercial Papers, Treasury Bills, CDs, Short-term Government securities.
Those with surplus short-term funds
3 weeks - 3 months
Bond Funds (Floating - Long-term)
Regular Income
Credit Risk & Interest Rate Risk
Predominantly Debentures, Government securities, Corporate Bonds
Salaried & conservative investors
More than 9 - 12 months
Gilt Funds
Security & Income
Interest Rate Risk
Government securities
12 months & more
Equity Funds
Long-term Capital Appreciation
High Risk
Stocks
Aggressive investors with long term out look.
3 years plus
Index Funds
To generate returns that are commensurate with returns of respective indices
NAV varies with index performance
Portfolio indices like BSE, NIFTY etc
Aggressive investors.
Balanced Funds
Growth & Regular Income
Capital Market Risk and Interest Rate Risk
Balanced ratio of equity and debt funds to ensure higher returns at lower risk
Moderate & Aggressive
2 years plus
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