Different Types of Mutual Fund in India (Part-1)

1. Open Ended Fund
In this type of fund the units are buy and sell in continuous basis. A investor could make a entry with his investment at any time or level and may exit too even if after the period of NFO (New Fund Offer). The units are bought and sold at the NAV (Net Asset Value) declared by the fund. The number of outstanding units goes up or down every time the fund house sells or repurchases the existing units. This is the reason that the unit capital of an open-ended mutual fund keeps varying.

2. Close Ended Fund

The unit capital of closed ended fund is fixed and they sell a specific number of units. like in open ended fund investors cannot buy the units of a closed ended fund after it's NFO period is over, this means that new investors can not enter nor can existing investors to exit the term of the scheme ends, however to provide a platform for investors to exit before the term the fund house list their closed ended schemes on a stock exchange.

3. Interval Funds

Its a partly open-ended and partly closed-ended fund. The units may be traded on the stock exchange or may be open for sale or redemption during pre-determined intervals at NAV-related prices. Fixed maturity plans, or, FMPs are examples of these types of schemes.


Continues........

Different Types of Mutual Fund in India (Part-2)

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