Mutual Fund Sahi Hai: Understanding All Types of Mutual Funds as per SEBI

 Your Complete Guide to Smart Investing in India

Mutual Fund – Quick Guide

💡 What is a Mutual Fund?

A mutual fund pools money from many investors to invest in stocks, bonds, or other assets, allowing even beginners to grow wealth with expert management.

When it comes to growing your wealth, one simple mantra is – “Mutual Fund Sahi Hai!” 🎯

But with so many choices, how do you know which one is right for you? 🤔

Categories by Company

🌟 Large Cap Funds (1–100 companies): Stable & lower risk, invest in top 100 companies.

⚖️ Mid Cap Funds (101–250 companies): Balanced growth, moderate risk, next 101–250 companies.

🚀 Small Cap Funds (251–5178 companies): High growth, higher risk, smaller companies.

✅ Why Mutual Funds?

Perfect for 95% of people, especially with less time & experience.

📈 Ideal for ₹20k-25k/month investment– Consistent long-term growth

💹 Double Returns vs FD – Grow wealth faster.

🛠️ Minimum Effort – Professionals handle everything.

⏳ Time-Saving – No research needed.

💸 Affordable – Start with any amount (₹500–1000+).

🔄 Flexible SIPs – No penalties for missed installments.

🏧 Anytime Withdrawal – Easy liquidity.

⚙️ Management Styles of Mutual Funds and your portfolio 

1️⃣ Passive (Index Fund) ✅

• No manager, simply copies a market index
• Examples: Nifty 50 (top 50 companies), Sensex 30
• Market return: 12–13% (last 40 yrs)
• Low cost, safe, best for beginners

Portfolio -Must have 1 index fund either nifty50 next50 Nifty100 or sensex 30 index etc.

2️⃣ Active Fund 💹

• Managed by experts aiming to beat the market
• Higher expenses
• Good for high growth & more exposure

⚠️ Remember: 2/3 active funds underperform while trying to beat the market

Portfolio 

1. Flexi-Cap:High growth moderate risk
2.  Multi-Cap: High growth, moderate risk
3. Small-Cap: Aggressive, high-risk, high-return

⚠️ Avoid hybrid funds with high fees – less growth, more cost

SEBI Classification of Mutual Funds (37 Categories)

SEBI (Securities and Exchange Board of India) steps into make investing easie, SEBI has neatly divided mutual funds into 37 categories across main four groups 

1. Equity
2. Debt
3. Hybrid
4. Other/Special Purpose Funds.

Let’s explore them step by step 👇

---

📈 Equity Funds (11 Categories)

👉 Best for long-term wealth creation

👉 Higher risk = Higher reward potential

1. 🟦 Large Cap Fund – Big & stable companies
2. 🔷 Large & Mid Cap Fund – Mix of big & mid-sized players
3. 🟩Mid Cap Fund – Growing mid-sized companies
4. 🟧 Small Cap Fund – Fast growth, high risk
5. 🟪 Multi Cap Fund – All sizes in one basket
6. 🔄Flexi Cap Fund – Manager’s choice, fully flexible
7. 💸Dividend Yield Fund – Regular dividend-paying stocks
8. 📊 Value Fund – Undervalued stocks for long-term
9. 🔁Contra Fund – Opposite market trend opportunities
10. 🎯 Focused Fund – Limited 20–30 high-conviction stocks
11. 🏭 Sectoral / Thematic Fund – Specific industries or themes

---

💰 Debt Funds (16 Categories)

👉 Best for safety + steady income 🛡️

👉 Lower risk, predictable returns

1. 🌙 Overnight Fund

2. 💧 Liquid Fund

3. ⚡ Ultra Short Duration Fund

4. ⏳ Low Duration Fund

5. 💵 Money Market Fund

6. 📉 Short Duration Fund

7. 📈 Medium Duration Fund

8. 🔗 Medium to Long Duration Fund

9. ⏰ Long Duration Fund

10. 🔄 Dynamic Bond Fund

11. 🏢 Corporate Bond Fund

12. ❗ Credit Risk Fund

13. 🏦 Banking & PSU Fund

14. 🏛️ Gilt Fund

15. 🕰️ Gilt Fund (10-Year Constant Duration)

16. 🌊 Floater Fund

⚖️ Hybrid Funds (6 Categories)👉 Best for those who want Balance = Growth + Stability ⚖️

1. 🟡Conservative Hybrid Fund – More debt, less equity

2. 🟢 Balanced Hybrid Fund – Equal mix

3. 🔴 Aggressive Hybrid Fund – More equity, less debt

4. 🔄 Dynamic Asset Allocation / Balanced Advantage Fund – Auto-adjusts to market

5. 🌐 Multi Asset Allocation Fund – Equity + Debt + Gold/others

6. 🤝Arbitrage Fund – Low-risk market opportunities

---

🌟 Other / Special Purpose Funds (4 Categories)

👉For tax-saving, passive, and diversified investing 🎁

1. 🛡️ Equity Linked Savings Scheme (ELSS) – Tax benefit u/s 80C

2. 📈 Index Fund – Follows Nifty / Sensex

3. 💹 Exchange Traded Fund (ETF) – Trades like a stock

4. 🌍 Fund of Funds (FoF) – Invests in other mutual funds

---

✨ Total Categories:

📊 11 (Equity) + 16 (Debt) + 6 (Hybrid) + 4 (Others) = 37

---

🏆 Final Takeaway

Mutual funds are like a buffet of investment options 🍽️ – you just need to pick what matches your taste:

1. 📊 Start with Index Funds → Nifty 50, Sensex 30 (low-cost market exposure)
2. 🚀 Want high growth? → Equity Funds-flexi cap or multi cap 
3. 🛡️ Want safety & steady income? → Debt Funds- liquid, ultra Short,short term 
4. ⚖️ Want balance? → Hybrid Funds-balance fund
5. 🎯 tax-saving & diversification? → Special Funds

👉 Remember: Mutual Fund Sahi Hai! 💚

💡 Pro Tip: Always match your investment with your goals, risk appetite, and time horizon. And if confused – consult a financial advisor.

⚠️ Disclaimer

Mutual fund investments are subject to market risks. Read all scheme-related documents carefully before investing. Past performance is not indicative of future returns. This information is for educational purposes only and should not be considered as financial advice. Please consult your financial advisor before making any investment decisions.