Mutual fund products can be classified based on their underlying portfolio compositions as below:
- The first level of categorization will be on the basis of the asset class the fund invests in, such as equity/debt/money market instruments or gold.
- The second level of categorization is on the basis of strategies and styles used to create the portfolio, such as Income fund, Dynamic Bond Fund, Infrastructure fund, Large-cap/Mid-cap/Small-cap Equity fund, Value fund, etc.
- The portfolio composition flows out of the investment objectives of the scheme.