What are Investment Goals in Mutual Funds? 

What are Investment Goals in Mutual Funds? 

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A mutual fund is a shared pool of money collected from several investors with the same objective. There are various types of mutual funds for different people with different financial needs. Investing in mutual funds can be short-term, long-term, and long-term. A professional fund manager or an Asset Management Company simplifies the process of investing in mutual funds. They will help you build a portfolio to track and manage your investments with ease and comfort. Mutual funds are broadly categorized into Asset Class, Structure, Risk Appetite, Specialization, and Investment Goals. 

Here are the different types of mutual funds that fall under Investment goals. 

Tax-saving Funds

Equity Linked Savings Scheme (ELSS) is a Tax saving mutual fund that allows you to invest in Equity and Equity-oriented securities. You can save up to Rs 1.5 lakh under section 80C of the Income Tax Act 1961. It comes with a lock-in period of 3 years. The income made at the end of the three-year tenure is called Long Term Capital Gain (LTCG).

Aggressive Growth Funds

An aggressive growth fund allows you to invest in the shares of growth company stocks to make capital gains. There is high share price volatility due to the volatile underlying assets. Investors willing to take on high risks to achieve the highest capital gains can opt for this mutual fund. 

Capital Protection Funds

Capital Protection Funds offer FD-like protection and Equity-like returns. They are closed-ended hybrid mutual fund schemes that invest in Debt and Equity. You can majorly invest in Debt ( AAA-rated bonds with a bit of chance of defaulting) and only a tiny fraction in Equity. You can safeguard the interest when economic downturns and preserve capital simultaneously. 

Growth Funds

Growth funds allow you to invest in growth stocks to achieve maximum capital appreciation. You can invest in more budding companies with potential or companies with a proven track record of great revenue growth. It is the best investment option for investors willing to take high-risk and achieve high returns for the long term. 

Income Funds

Income funds come under Debt funds. They allow you to invest in Corporate bonds, Government bonds, and Money market instruments. You can invest in income funds for four years and more. The share prices of income funds are changeable; they fall when interest rates are high and increase when interest rates are low.

Liquid Funds

A Liquid Mutual Fund comes under debt funds. It allows you to invest in fixed-income instruments such as Commercial paper, Government securities, Treasury bills, etc., where you will get a maturity of up to 91 days. You can complete your withdrawal within 24 hours. It comes with the lowest interest-rate risk in the category of debt funds.

Pension Funds

Pension funds are those mutual funds where an investor can save a particular portion of your income for retirement. They are known as Retirement funds. After retirement, the investor gets a regular source of finance until their demise. The investor will get a fixed benefit—these funds do not depend upon asset return and market fluctuations. 

Fixed Maturity Funds

Fixed Maturity Funds are commonly known as FMPs. They are close-ended debt funds that have a fixed lock-in period. They come with a limited investment window. You can invest in debt securities like certificates of deposit, treasury bills, corporate bonds, etc., during a new fund offer (NFO). The tenure ranges from 30 days to five years. 

The Final Thought 

A mutual fund is a trust where a professional fund manager or an Asset management company collects funds from investors by giving them the corresponding units. You can invest in Equity, bonds, and other securities through Investment Goals. You can choose any of the types of Investment Goals that align with your financial goals. 

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