Types of mutual fund schemes.

Six ways to slice the same universe

Mutual funds can be classified along several independent dimensions at once — a single scheme is usually described by more than one of these. It helps to keep the dimensions separate rather than treating "types of mutual funds" as one flat list.

By organisation structure

• Open-ended — no fixed end date; you can buy or redeem units on any business day at the prevailing NAV. Most funds people invest in are open-ended.
• Close-ended — units are issued once, during a fixed offer window, and redeemed only at maturity. To give investors an exit before then, these are listed on a stock exchange.
• Interval — a hybrid of the two: the fund reopens for transactions only during specific windows, each at least 2 days long, with a minimum 15-day gap between windows.

By how the portfolio is managed

• Active — a fund manager decides what to buy, hold, and sell, aiming to beat a benchmark index. Returns depend on how good those calls turn out to be.
• Passive — the portfolio simply mirrors an index (index funds, most ETFs). The fund manager's job is to track the benchmark closely, not to beat it — which usually means lower costs.

By investment objective

Growth (capital appreciation), regular income, capital preservation, liquidity, and tax-saving are the five objectives SEBI recognises. A single scheme's category is largely a statement about which of these it's optimised for.

The main categories, in detail

This is the classification most people mean when they ask "what type of mutual fund is this" — by underlying portfolio. Pick a category below.