Types of Mutual Funds in India 2024

Do you know the types of Mutual Funds in India? As on 31st July 2023, there are 45 Mutual Fund Companies in India and the number of schemes offered by all these mutual fund companies in total is 1,453!! Obviously, this will confuse the investors to choose.

Types of Mutual Funds in India

How many mutual fund companies are there in India?

As per the current SEBI data, there are 47 Mutual Fund Companies are there in India. I am providing the list of all Mutual Fund Companies. The below list is as on 31st July 2023.

  1. 360 One Mutual Fund
  2. Aditya Birla Sunlife Mutual Fund
  3. Axis Mutual Fund
  4. Bajaj Finserv Mutual Fund
  5. Baroda Mutual Fund
  6. BNP Paribas Mutual Fund
  7. BOI Axa Mutual Fund
  8. Canara Robeco Mutual fund
  9. DSP Mutual Fund
  10. Edelweiss Mutual Fund
  11. Franklin Templeton Mutual Fund
  12. Groww Mutual Fund
  13. HDFC Mutual Fund
  14. HSBC Mutual Fund
  15. ICICI Prudential Mutual Fund
  16. IDBI Mutual Fund
  17. IDFC Mutual Fund
  18. IFCL Mutual Fund
  19. IL&FS IDF Mutual Fund
  20. Invesco Mutual Fund
  21. ITI Mutual Fund
  22. HM Financial Mutual Fund
  23. Kotak Mutual Fund
  24. LIC Mutual Fund
  25. Mahindra Manulife Mutual Fund
  26. Mirea Asset Mutual Fund
  27. Motilal Oswal Mutual Fund
  28. N J Mutual Fund
  29. Navi Mutual Fund
  30. Nippon India Mutual Fund
  31. PGIM India Mutual Fund
  32. PPFAS Mutual Fund
  33. Principal Mutual Fund
  34. Quant Mutual Fund
  35. Quantum Mutual Fund
  36. Samco Mutual Fund
  37. SBI Mutual Fund
  38. Sriram Mutual Fund
  39. Sundaram Mutual Fund
  40. Tata Mutual Fund
  41. Taurus Mutual Fund
  42. Trust Mutual Fund
  43. Union Mutual Fund
  44. UTI Mutual Fund
  45. Whiteoak Capital Mutual Fund

(I have excluded the AMCs like Sahara Mutual Fund and CRB Mutual Fund, even though they are available on SEBI’s list).

How many Mutual Funds are available in India?

According to the latest data of AMFI (31st July 2023), there are around 1,453 mutual funds available for investors to invest in.

This is obviously a confusing factor for many investors (and for that matter even for financial planners also). As an individual investor, we don’t need more than 4-5 funds (including equity and debt). However, mutual fund companies are bombarded with their offerings.

Types of Mutual Funds in India 2023

As per the latest AMFI data, there are around 47 categories of funds available. This list is not exhaustive as for example, Index funds are all categories under one category.

Let us go deeper and try to understand the types of mutual funds in India.

The most important category for any mutual fund investors to choose is DIRECT Vs REGULAR. Regular means you are investing through middlemen and he will earn a certain commission. Direct means you are investing in a fund there is no middlemen commission involved. The rest of the categories I am trying to classify are based on AMFI and SEBI’s mutual fund classification.

In a broader sense, as per AMFI, mutual funds are classified as below.

  1. Organization Structure – Open-ended, Close ended, Interval
  2. Management of Portfolio – Actively or Passively
  3. Investment Objective – Growth, Income, Liquidity
  4. Underlying Portfolio – Equity, Debt, Hybrid, Money market instruments, Multi-Asset
  5. Thematic / solution oriented – Tax saving, Retirement benefit, Child welfare, Arbitrage
  6. Exchange Traded Funds
  7. Overseas funds
  8. Fund of funds

1) Scheme classification based on the organizational structure

Open-ended schemes are perpetual, and open for subscription and repurchase on a continuous basis on all business days at the current NAV.

• Close-ended schemes have a fixed maturity date. The units are issued at the time of the initial offer and redeemed only on maturity. The units of close-ended schemes are mandatorily listed to provide an exit route before maturity and can be sold/traded on the stock exchanges.

• Interval schemes allow purchase and redemption during specified transaction periods (intervals). The transaction period has to be for a minimum of 2 days and there should be at least a 15-day gap between two transaction periods. The units of interval schemes are also mandatorily listed on the stock exchanges.

2) Scheme classification based on the organizational structure

Active Funds

In an Active Fund, the Fund Manager is ‘Active’ in deciding whether to Buy, Hold, or Sell the underlying securities and in the stock selection. Active funds adopt different strategies and styles to create and manage the portfolio.

  • The investment strategy and style are described upfront in the Scheme Information Document (offer document)
  • Active funds expect to generate better returns (alpha) than the benchmark index.
  • The risk and return in the fund will depend upon the strategy adopted.
  • Active funds implement strategies to ‘select’ the stocks for the portfolio.

Passive Funds

Passive Funds hold a portfolio that replicates a stated Index or Benchmark e.g. –

  • Index Funds
  • Exchange Traded Funds (ETFs)

In a Passive Fund, the fund manager has a passive role, as the stock selection / Buy, Hold, Sell decision is driven by the Benchmark Index, and the fund manager/dealer merely needs to replicate the same with minimal tracking error.

3) Scheme classification based on the organizational structure

Mutual funds offer products that cater to the different investment objectives of the investors such as –

  1. Capital Appreciation (Growth) – Growth Funds are schemes that are designed to provide capital appreciation. They primarily invest in growth-oriented assets, such as equity. Historically, Equity as an asset class has outperformed most other kind of investments held over the long term. However, returns from Growth funds tend to be volatile over the short term since the prices of the underlying equity shares may change. Hence investors must be able to take volatility in the returns in the short term.
  2. Capital Preservation – The primary reason for choosing such funds is the protection of the principal. Ideally, overnight funds, liquid funds, or money market funds fall under this category.
  3. Regular Income – The objective is to provide regular income. Income funds invest in fixed-income securities such as Corporate Bonds, Debentures, and Government securities. The fund’s return is from the interest income earned on these investments as well as capital gains from any change in the value of the securities. The fund will distribute the income provided the portfolio generates the required returns. There is no guarantee of income. The returns will depend upon the tenor and credit quality of the securities held.
  4. Liquidity – Open-ended funds fall under this category. Do remember that open-ended funds include safe funds like overnight or liquid funds to equity funds also. Hence, you have to be cautious while selecting.

4) Underlying Portfolio – Equity, Debt, Hybrid, Money market instruments, Multi-Asset

Mutual fund products can be classified based on their underlying portfolio composition
– The first level of categorization will be on the basis of the asset class the fund invests in, such as equity/debt/money market instruments or gold.
– The second level of categorization is on the basis of strategies and styles used to create the portfolio, such as Income fund, Dynamic Bond Fund, Infrastructure fund, Large-cap/Mid-cap/Small-cap Equity fund, Value fund, etc.
– The portfolio composition flows out of the investment objectives of the scheme.

5) Thematic / solution oriented – Tax saving, Retirement benefit, Child welfare, Arbitrage

Thematic funds mean the funds follow certain themes or sectors like health or automobile.

ELSS funds fall under this category. Nowadays passive index funds are also gaining popularity. However, with the introduction of a new tax regime and not increasing the limit of Sec.80C limit, ELSS funds are slowly turning unpopular among investors.

Along with these, there are certain retirement benefit funds and child welfare-related funds also there in the market. They come with certain lock-in features. I am unsure why Arbitrage is included in this category by AMFI.

6) Exchange Traded Funds (ETF)

There are primarily index funds only but they are traded like stocks in the secondary market. They fall under passive funds and they are low cost in nature. However, in the Indian context, they are still not so liquid. Again, here you may find debt, equity, or gold ETFs based on the assets you wish to invest.

7) Fund of Funds (FoFs)

Fund Of Funds means they invest in another fund based on the theme, style, or asset class. Take for example, if an XYZ Nifty 50 FoF is investing in its own XYZ Nifty 50 ETF, then it is called a Fund Of Fund. Usually, such a setup is made by AMCs to provide liquidity for the investors.

The above classification is as per the AMFI website. The Securities and Exchange Board of India (SEBI) announced a bold move in October 2017. In a circular, it did  Mutual Fund Categorization and Rationalization into five broad categories (equity, debt, hybrid, solution-oriented, and others) and a few sub-categories under them (such as large-cap, mid-cap, small-cap under equity). Mutual fund houses would then only be able to have one scheme in each sub-category, with some exceptions.

As per the SEBI, the types of Mutual Funds in India are broadly categorized as below.

a. Equity Schemes
b. Debt Schemes
c. Hybrid Schemes
d. Solution-Oriented Schemes
e. Other Schemes

Within these schemes again the various categories are specified. Let us see one by one. Let me share the same through this below image.

Types of Mutual Funds as per SEBI

Now, let us understand the definition of these categories in detail like how SEBI defined them.

a. Equity Schemes

1Multi Cap Funds Minimum investment in equity & equity related instruments–65% of total assetsMulti Cap Fund – An equity mutual fund investing across Large Cap, Mid Cap, Small Cap stocks
2Large Cap FundsMinimum investment in equity & equity related instruments of large cap companies – 80% of total assetsLarge Cap Fund – An equitymutual fund predominantly investing in Large Cap stocks
3Large & Mid Cap FundsMinimum investment in equity & equity related instruments of large cap companies – 35% of total assetsMinimum investment in equity & equity related instruments of mid cap stocks – 35% of total assetsLarge & Mid Cap Fund – An open ended equity mutualfund investing in both large cap and mid cap stocks
4Mid Cap FundsMinimum investment in equity & equity related instruments of mid cap companies – 65% of total assetsMid Cap Fund – An equitymutual fund predominantly investing in Mid Cap stocks
5Small Cap FundsMinimum investment in equity & equity related instruments of small cap companies – 65% of total assetsSmall Cap Fund – An equitymutual fund predominantly investing in Small Cap stocks
6Dividend Yield FundsScheme should predominantly invest in dividend yielding stocks. Minimum investment in equity – 65% of total assetsAn equitymutual fund predominantly investing in dividend yielding stocks
7aValue Funds*Scheme should follow a value investment strategy. Minimum investment in equity & equity related instruments – 65% of total assetsAn equitymutual fund following a value investment strategy
7bContra Funds*Scheme should follow a contrarian investment strategy. Minimum investment in equity & equity related instruments – 65% of total assetsAn equitymutual fund following contrarian investment strategy
8Focused FundsA scheme focused on the number of stocks (maximum 30) Minimum investment in equity & equity related instruments – 65% of total assetsAn equity scheme investing in maximum 30 stocks (mention where the scheme intends to focus, viz., multi cap, large cap, mid cap, small cap)
9Sectoral Funds or ThematicMinimum investment in equity & equity related instruments of a particular sector/particular theme – 80% of total assetsAn open ended equity scheme following the theme as mentioned
10ELSS FundsMinimum investment in equity & equity related instruments – 80% of total assets (in accordance with Equity Linked Saving Scheme, 2005 notified by Ministry of Finance)An open ended equity linked saving scheme with a statutory lock in of 3 years and tax benefit

b.Debt Schemes

1Overnight FundsInvestment in overnight securities having maturity of 1 dayA debt scheme investing in overnight securities
2Liquid FundsInvestment in Debt and money market securities with maturity of upto 91 days onlyA liquid scheme
3Ultra Short Duration FundsInvestment in Debt & Money Market instruments such that the Macaulay duration of the portfolio is between 3 months – 6 monthsAn ultra – short term debt scheme investing in instruments with Macaulay duration between 3 months and 6 months
4Low Duration FundsInvestment in Debt & Money Market instruments such that the Macaulay duration of the portfolio is between 6 months – 12 monthsA low duration debt scheme investing in instruments with Macaulay duration between 6 months and 12 months
5Money Market FundsInvestment in Money Market instruments having maturity up to 1 yearA debt scheme investing in money market instruments
6Short Duration FundInvestment in Debt & Money Market instruments such that the Macaulay duration of the portfolio is between 1 year – 3 yearsA short term debt scheme investing in instruments with Macaulay duration between 1 year and 3 years
7Medium Duration FundsInvestment in Debt & Money Market instruments such that the Macaulay duration of the portfolio is between 3 years – 4 yearsA medium term debt scheme investing in instruments with Macaulay duration between 3 years and 4 years
8Medium to Long Duration FundInvestment in Debt & Money Market instruments such that the Macaulay duration of the portfolio is between 4 – 7 yearsA medium term debt scheme investing in instruments with Macaulay duration between 4 years and 7 years
9Long Duration FundInvestment in Debt & Money Market Instruments such that the Macaulay duration of the portfolio is greater than 7 yearsA debt scheme investing in instruments with Macaulay duration greater than 7 years
10Dynamic Bond FundsInvestment across durationA dynamic debt scheme investing across duration
11Corporate Bond FundsMinimum investment in corporate bonds – 80% of total assets (only in highest rated instruments)A debt scheme predominantly investing in highest rated corporate bonds
12Credit Risk FundsMinimum investment in corporate bonds – 65% of total assets ( investment in below highest rated instruments)A debt scheme investing in below highest rated corporate bonds
13Banking and PSU FundMinimum investment in Debt instruments of banks, Public Sector Undertakings, Public Financial Institutions – 80% of total assetsA debt scheme predominantly investing in Debt instruments of banks, Public Sector Undertakings, Public Financial Institutions
14Gilt FundMinimum investment in Gsecs – 80% of total assets (across maturity)A debt scheme investing in government securities across maturity
15Gilt Fund with 10 year constant durationMinimum investment in Gsecs – 80% of total assets such that the Macaulay duration of the portfolio is equal to 10 yearsA debt scheme investing in government securities having a constant maturity of 10 years
16Floater FundMinimum investment in floating rate instruments – 65% of total assetsA debt scheme predominantly investing in floating rate instruments

c. Hybrid Schemes

1Conservative Hybrid FundsInvestment in equity & equity related instruments – between 10% and 25% of total assets; Investment in Debt instruments – between 75% and 90% of total assetsA hybrid mutual fund investing predominantly in debt instruments
2ABalanced Hybrid Funds@Equity & Equity related instruments – between 40% and 60% of total assets; Debt instruments – between 40% and 60% of total assets. No Arbitrage would be permitted in this scheme50-50 balanced scheme investing in equity and debt instruments
2BAggressive Hybrid FundsEquity & Equity related instruments – between 65% and 80% of total assets; Debt instruments – between 20% – 35% of total assets. Most of the balanced funds will fall into this category.A hybrid scheme investing predominantly in equity and equity related instruments
3Dynamic Asset Allocation Funds or Balanced AdvantageInvestment in equity/ debt that is managed dynamically. All famous balanced advantage or dynamic funds will fall into this category.A hybrid mutual fund which will change its equity exposure based on market conditions
4Multi-Asset Allocation FundsInvests in at least three asset classes with a minimum allocation of at least 10% each in all three asset classes. Foreign investment will be considered as a separate asset class.A scheme investing in 3 different assetclasses.
5Arbitrage FundsScheme following arbitrage strategy. Minimum investment in equity & equity related instruments – 65% of total assetsA scheme investing in arbitrage opportunities
6Equity SavingsMinimum investment in equity & equity related instruments – 65% of total assets and minimum investment in debt – 10% of total assets. Minimum hedged & unhedged to be stated in the SID.  Asset Allocation under defensive considerations may also be stated in the Offer DocumentA scheme investing in equity, arbitrage, and debt

d. Solution-Oriented Schemes:

1Retirement FundScheme having a lock – in for at least 5 years or till retirement age whichever is earlierA retirement solution oriented scheme having a lock-in of 5 years or till retirement age (whichever is earlier)
2Children’s FundScheme having a lock – in for at least 5 years or till the child attains age of majority whichever is earlierA fund for investment for children having a lock – in for at least 5 years or till the child attains age of majority (whichever is earlier)

e.Other Schemes:-

1Index Funds/ ETFsMinimum investment in securities of a particular index (which is being replicated/ tracked) – 95% of total assetsA mutual fund replicating/ tracking any index
2FoF’s (Overseas/Domestic)Minimum investment in the underlying fund – 95% of total assetsA fund of fund is a mutual fund that invests in other mutual funds

I have written detailed posts on this aspect. You can refer to the same –

Now, based on the above two classifications, I have created the list with types of mutual funds in India and the number of schemes available under each category of schemes (based on 31st July 2023 AMFI data).

Types of Mutual Funds in India
(www.basunivesh.com)
Gilt Fund with 10-year constant duration
Income/Debt Oriented SchemesNumber of Funds
Overnight Fund36
Liquid Fund37
Ultra Short Duration Fund24
Low Duration Fund21
Money Market Fund24
Short Duration Fund24
Medium Duration Fund15
Medium to Long Duration Fund12
Long Duration Fund7
Dynamic Bond Fund22
Corporate Bond Fund21
Credit Risk Fund14
Banking and PSU Fund23
Gilt Fund22
Growth/Equity-Oriented Schemes5
Floater Fund13
Multi-Asset Allocation FundNumber of Funds
Multi Cap Fund21
Large Cap Fund30
Large & Mid Cap Fund26
Mid Cap Fund29
Small Cap Fund24
Dividend Yield Fund9
Value Fund/Contra Fund23
Focused Fund27
Sectoral/Thematic Funds135
ELSS42
Flexi Cap Fund35
Hybrid SchemesNumber of Funds
Conservative Hybrid Fund20
Balanced Hybrid Fund/Aggressive Hybrid Fund30
Dynamic Asset Allocation/Balanced Advantage Fund29
Capital Protection-Oriented Schemes13
Arbitrage Fund26
Equity Savings Fund22
Solution Oriented SchemesNumber of Funds
Retirement Fund26
Childrens Fund10
Other SchemesNumber of Funds
Index Funds188
GOLD ETF13
Other ETFs173
Fund of funds investing overseas50
Total Open Ended1321
b) Close Ended Schemes
Income/Debt Oriented SchemesNumber of Funds
Fixed Term Plan89
Growth/Equity-Oriented Schemes1
Infrastructure Debt Fund7
Total Close-Ended SchemesNumber of Funds
ELSS19
Other Equity Schemes4
Total Close Ended Schemes120
c) Interval Schemes
Income/Debt Oriented Schemes12
Total Mutual Funds in India1453
Note – Data as pr 31st July 2023 AMFI Report

Number of AMCs increasing day by day and also the mutual funds. Hence, you have to be cautious in choosing mutual funds based on your requirements. Otherwise, you end up selecting the wrong product (especially if you concentrate too much on returns by neglecting the risk).

9 Responses

  1. Hey ..its comprehensive article , really good for those who has some understanding about mutual funds. I like the way it has been presented . Thanks for posting

      1. From where I can download this blogpost in word or any other format which I can save on my laptop because it is actually a gem of an article on mutual funds in India and I want to keep a copy of this as a record with me.

        1. Dear kamal,
          Just wait for another 10 days. I am changing the theme and I will add the option to save as word or PDF for your reference.

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