Funds that can sell and purchase units at any point of time are classified as Open-Ended Funds. An open-end fund is not required to keep selling new units to the investors at all times but is required to always repurchase, when an investor wants to sell his units. The NAV of this fund is calculated every day.
Funds that can sell a fixed number of units during the New Fund Offer (NFO) period are known as Closed-end Funds. These funds are listed on stock exchanges where investors can buy/sell units from/to each other. The NAV of these funds is computed on a weekly basis (every Thursday ).
Equity funds invest a maximum part of their corpus into equities. The structure of the fund may be different for every scheme and it depends on the manager's outlook on different stocks. These funds are further sub-divided depending upon their investment objective, as follows:
The objective of these funds is to invest in debt instruments issued by the government authorities, private companies, banks and financial institutions. By investing in debt instruments, these funds ensure low risk and provide stable income to the investors. Debt funds are further classified as:
These funds invest in both equities and fixed income securities ( debt instruments), which are in line with pre-defined investors objective of the scheme and aim to provide investors with the best of both. Equity part provides growth and the debt part provides stability in returns.
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