There are over 1500 mutual fund schemes with option combinations that takes the choices to be made to over 10000.When you go to choose a Car where do you begin?You choose category first Hatchback,Sedan,SUV,luxury is your first cut of category,Isn’t it?Then you deeper on specifications within category.we can do this choice with mutual fund.First we choose category and then scheme for it.There are thirty seven category across five groups.There are eleven categories in equity,sixteen in debt,six in hybrid,two in solution oriented and two in others.
| Equity | Debt | Hybrid | Solution oriented | Other Scheme |
| Multi Cap | Overnight | Conservative hybrid | Retirement fund | Index ETFs |
| Large Cap | Liquid | Balanced agressive hybrid | FoF (Overseas domestic) | |
| Large and Mid cap | Ultra Short Duration | Dynamic asst allocation balance advantage | ||
| Mid cap | Low Duration | Multi asset allocation | ||
| Small Cap | Money Market | Arbitrage | ||
| Dividend yield | Short Duration | Equity Savings | ||
| Value contra | Medium duration | |||
| Focused | Medium to long duration | |||
| Sectoral thematic | Long Duration | |||
| ELSS | Dynamic bond | |||
| Flexi cap | Corporate bond | |||
| crdit risk | ||||
| Banking and PSU | ||||
| Gilt | ||||
| Gilt with ten year constant duration |
You need to belt up now for deep dive into categories and their best fit uses.You need equity in your portfolio to give long term growth.We can divide the stocks in the market into three buckets based on their market cap.Market cap is just the number of stocks multiplied by the market price to give an indication of the size of the company rather than using turnover or profit.Large cap stocks are the first 100 stocks listen on the stock exchange in india.Mid cap stocks lie between 101st stock to 250th stock.Small caps are 251st stock onwards in terms of market cap.Large cap stocks are typically of large well established companies that are in the mature phase of their growth.Investors usually use large caps to give return stability to their equity portfolio.Mid caps are fast growing companies that have potential to one day become large cap if they can keep growing.Small cap are the riskiest part of the market,But have the potential to give very high returns.
Thus depend on above scenarios one can invest their money in the mutual fund and choose the best fund for them.
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