How many types of mutual funds are there in India?

In India, mutual funds are classified into various categories based on their investment objectives, asset allocation, and strategies.

Debt Funds: Debt funds invest in fixed-income securities like bonds, government securities, and corporate debt, offering regular income and lower risk compared to equity funds.

Hybrid Funds: Hybrid funds, also known as balanced funds, invest in a mix of equities and debt instruments, aiming to provide a balance between growth and income.

Liquid Funds: Liquid funds invest in very short-term debt instruments and provide high liquidity, making them suitable for parking surplus cash.

Index Funds: These funds aim to replicate the performance of a specific stock market index, such as the Nifty 50 or Sensex.

Money Market Funds: Money market funds invest in short-term, low-risk money market instruments like Treasury bills and commercial paper, ideal for conservative investors.

Sectoral and Thematic Funds: These funds focus on specific sectors or themes, allowing investors to bet on a particular industry or trend.

Exchange-Traded Funds (ETFs): ETFs are passively managed funds that trade on stock exchanges and aim to replicate the performance of an underlying index.

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