Types Of Mutual Funds In India

CA Manish K Dhoot (CA, B. Com, NCFM, CPCM) (5015 Points)

12 August 2010  

 

Types Of Mutual Funds In India

Mutual Fund Scheme By Structure

Open-end Funds
An open-end fund is one that is available for subscripttion all through the year. These do not have a fixed maturity. Investors can conveniently buy and sell units at Net Asset Value (''NAV'') related prices. The key feature of open-end schemes is liquidity.

Closed-end Funds
A closed-end fund has a stipulated maturity period which generally ranging from 3 to 15 years. The fund is open for subscripttion only during a specified period. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where they are listed. In order to provide an exit route to the investors, some close-ended funds give an option of selling back the units to the Mutual Fund through periodic repurchase at NAV related prices. SEBI Regulations stipulate that at least one of the two exit routes is provided to the investor.

Interval Funds
Interval funds combine the features of open-ended and close-ended schemes. They are open for sale or redemption during pre-determined intervals at NAV related prices.