"Understanding the different types of mutual funds: equity, debt, and hybrid"
Mutual funds are investment vehicles that pool money from multiple investors to purchase a diversified portfolio of stocks, bonds or other securities. There are different types of mutual funds available in the market and it is important to understand the differences between them for informed investment decisions. Here's a look at the three main types of mutual funds: equity, debt and hybrid. 1 - Equity Mutual Funds: Equity mutual funds invest primarily in stocks or shares of companies. These funds may focus on a specific sector or industry, such as healthcare or technology, or may have a diversified portfolio of stocks across different sectors. Equity funds are known for their potential to generate high returns, but they also carry a higher level of risk. Equity funds are suitable for investors with a long-term investment horizon and a higher risk tolerance. 2 - Debt Mutual Funds: Debt mutual funds invest primarily in fixed income securities such as bonds, treasury bill...