Mutual Funds are categorized based on their investment strategy, risk level, and asset allocation. Below are the major types of Mutual Funds:

• Equity Mutual Funds (Invest in stocks)
  
  • Large Cap Funds: Invest in well-established, large companies.
     
  • Mid Cap Funds: Invest in mid-sized companies with growth potential.
     
  • Small Cap Funds: Invest in emerging small-sized companies.
    
     
• Debt Mutual Funds (Invest in bonds and fixed-income securities)
  
  • Short-Term Debt Funds: Invest in short-term instruments like treasury bills.
     
  • Long-Term Debt Funds: Invest in long-term bonds and government securities.
     
  • Liquid Funds: Invest in short-term money market instruments for high liquidity.
    
     
• Hybrid or Balanced Funds (Combination of equity and debt)
  
  • Conservative Hybrid Funds: Higher allocation to debt for stability.
     
  • Balanced Hybrid Funds: Equal mix of equity and debt.
     
  • Aggressive Hybrid Funds: Higher allocation to equities for higher growth.
    
     
• Index Funds: Passively managed funds that replicate stock market indices like Nifty 50 or Sensex.
   
• Sectoral & Thematic Funds: Invest in a particular sector (e.g., IT, healthcare) or a theme (e.g., ESG investing).
   
• Tax-Saving Mutual Funds (ELSS): Offer tax benefits under Section 80C of the Income Tax Act with a 3-year lock-in period.
   
• Gilt Funds: Invest only in government securities, offering lower risk.
   
• International Funds: Invest in stocks and securities outside India.
   
• Gold Funds: Invest in gold ETFs or gold mining companies.
   
• Fixed Maturity Plans (FMPs): Close-ended funds that invest in fixed-income securities with a predefined maturity date.
   

Investors should choose Mutual Funds based on their financial goals, risk appetite, and investment horizon.