Investments are subject to market risks. Read all scheme-related documents carefully.
Investments
An educational guide to how mutual funds are structured and categorised in India, and what to look at before committing money to any of them.
The basics
A mutual fund pools money from many investors and invests it according to a stated objective. Each investor holds units representing a share of the pool, and the value of a unit — the net asset value — moves with the value of the underlying holdings.
The scheme is managed by an asset management company, regulated by SEBI, with the assets held by a separate trustee structure. Pooling gives an individual investor access to a spread of holdings that would be impractical to assemble alone.
What pooling does not do is remove risk. A diversified scheme can still fall in value, sometimes substantially, and for extended periods.
This website does not recommend or rank individual schemes. Which scheme is appropriate depends on your goal, horizon, existing holdings and capacity for risk — none of which a web page can know.
Explore investment solutions based on your financial goals and risk considerations, and speak to our team about what would actually fit.
Categories
Category tells you the mandate a scheme must follow. It says nothing about how any individual scheme has performed, or will perform.
Invest predominantly in shares of listed companies. Values move considerably in the short term, including downwards, and these schemes are generally discussed in the context of longer holding periods.
Invest in bonds, government securities and money market instruments. Generally less volatile than equity, but not risk-free.
Hold a mix of equity and debt in proportions set by the scheme's mandate. The mix determines the risk, so two hybrid schemes can behave very differently.
Aim to track a specified index rather than to beat it. Returns track the index, less costs and any tracking difference.
Equity Linked Savings Schemes are equity funds carrying a statutory lock-in on each instalment, and are eligible for a deduction under the applicable section of the Income Tax Act.
SEBI prescribes a defined list of scheme categories, including solution-oriented, fund-of-funds and other structures, each with its own mandate.
Lump sum investing
A lump sum investment puts the full amount to work from day one. That means the whole sum is exposed to market movement immediately, which makes the entry point matter far more than it does with a systematic plan.
Some investors phase a large amount in over several months rather than committing it at once, accepting a possibly lower outcome in exchange for less dependence on a single date. Neither approach is universally correct.
Whichever route is used, the amount invested should be money you will not need during the period you intend to stay invested. Being forced to exit during a fall converts a temporary decline into a realised loss.
Project the value of a monthly SIP over your chosen investment horizon.
Project a one-time investment left to compound.
Combine a lump sum and a monthly investment in a single projection.
Building Wealth. Securing Futures.
Rather than starting from a product, start from what the money is for and when you need it. Our team can then explain which categories are worth considering, and why.
Investments are subject to market risks. Returns are not guaranteed. Any discussion is educational in nature and is not a recommendation to buy or sell a financial product.