Choose category A scheme objective indicates the desired returns by way of capital appreciation by the mutual fund. Based on broad objectives there are 6 categories. More Sectoral Fund - International
FOF Gold
ETF Equity Invest predominantly in stocks. Provide returns by way of capital appreciation.
More volatile, but better returns. Good for long-term investors. Typical returns over long term of 15-25% p.a. Equity schemes are of the type:
Arbitrage Fund
Balanced Invest both in equity and income-bearing instruments. Reduce risks of investing
in stocks by having a stake in both the equity and the debt markets. Flexibility in changing asset composition between equity and debt. Less risky than equity schemes, higher returns than debt schemes. Typical returns of 15-18% p.a.
ETF
Equity-Derivative
Equity-Diversified Provide capital appreciation over a medium to long period (2 - 5 years). Invest in stocks from a diverse array of industries. Prevent adverse impact due to a downturn in one or two sectors. Less volatile to sectoral schemes. Typical returns between 15-25% p.a.
Equity-ELSS Offer tax rebates under section 88 of the IT law. Diversify the equity risk by investing in a wider array of stocks across sectors. Variant of diversified equity. Typical returns between 15-20% p.a.
Equity-Index Invest in stocks that make up a particular index. Investment in each stock is in proportion to the stock's weight in the index. Volatility in sync with the index. A bull market can get max returns of 40% p.a. Bad year can erode principal by 30%.
FOF
Sectoral-Auto
Sectoral-Bank
Sectoral-Basic Invest only in stocks in the basic industry (core industries like petrochemicals, cement, steel, etc.) sector e.g., TISCO & Reliance. Least volatile to other sectoral schemes. Benefit in the medium term (2 years). Typical returns could be as high as 15%.
Sectoral-FMCG Invest only in stocks in the fast moving consumer goods sector e.g., HLL & Cadbury's. Medium risk-reward ratio. Benefit in the short term (2 years). Typical returns could be as high as 25%.
Sectoral-Financial Services
Sectoral-Healthcare
Sectoral-Infrastructure
Sectoral-Media and Entertainment
Sectoral-Pharma Invest only in stocks in the pharmaceutical sector e.g., Ranbaxy & Novartis. Medium risk-reward ratio. Benefit in the medium term (2 years). Typical returns could be as high as 25%.
Sectoral-Power
Sectoral-Services
Sectoral-TMT Invest only in stocks in the technology, media & telecom sector e.g., Infosys &
Zee Telefilms. High risk-reward ratio. Benefit in the short term (1 year). Typical returns could be as high as 50%.
Debt Invest mainly in income-bearing instruments like bonds, debentures, government securities, commercial paper & call money. Less volatile than equity schemes. Volatility depends on rupee depreciation, fiscal deficit, inflationary pressure etc. Returns depend on bond ratings. Typical returns between 7 to 12% p.a. Debt schemes are of the type:
Balanced Invest both in equity and income-bearing instruments. Reduce risks of investing
in stocks by having a stake in both the equity and the debt markets. Flexibility in changing asset composition between equity and debt. Less risky than equity schemes, higher returns than debt schemes. Typical returns of 15-18% p.a.
FOF
Gilt Invest in government and money market securities or their combination. Tend to give higher returns than money market schemes. Good for parking short-term surplus funds. Easy entry & exit without load. Instant cash on redemption. Slightly volatile. Typical returns of 8.5-10% p.a.
Income Slightly more overweighed on corporate bonds (50-60% of portfolio). Also invests in government securities and money market instruments. Ideally suited for investment beyond 1 year. Typical returns of 11-12% p.a.
Liquid Invest in short-term debt instruments like T-bills, CDs, commercial papers & call money. Preserve the principal while yielding a modest return. Ideal for corporate investors. Good for parking short-term surplus funds. Easy entry & exit without load. Instant cash on redemption. Typical returns between 7-8% p.a.
Liquid - Plus
MIP Variant of income scheme. Provide option to get monthly returns in the form of dividends. Returns are however not assured (except UTI). Typical returns of 10.5 -11.5% p.a.
Balanced
Balanced Invest both in equity and income-bearing instruments. Reduce risks of investing
in stocks by having a stake in both the equity and the debt markets. Flexibility in changing asset composition between equity and debt. Less risky than equity schemes, higher returns than debt schemes. Typical returns of 15-18% p.a.
FOF
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