In the First Part, I explained about what is Mutual Funds and their advantages and disadvantages. In this part I am going to explain the basic types of mutual funds. Mutual funds can be categories according to Maturity Period or Investment Objective.
Mutual Funds according to Maturity Period
Based on the maturity period mutual fund schemes can be categories into two types
1. Open Ended Mutual Funds
1. Open Ended Mutual Funds
An Open Ended Mutual fund is one that is available to purchase and repurchase continuously. Liquidity is the main feature of open ended mutual funds. There is no maturity date for open ended mutual funds. Investors can buy or sell unit at any time based on NAV which is declared on a daily basis.
