There are many types of mutual fund some of them which are famous are-

1️⃣ **Equity Mutual Funds -:
*In this mutual fund, the fund manager invests majorly in shares (stocks).The risk is high in this, but the return is also good in the long term. It can be divided into many categories.➡️ Example:

• Large Cap Fund – In this, the fund manager invests in shares of big and stable companies like Reliance, TCS, Infosys. The risk is low in these and the return is also good.
• Mid Cap Fund – In this the fund manager invests in shares of medium-sized companies like Bajaj Holdings, Minda Industries etc. It has higher risk than large cap and the return is also higher.
• Small Cap Fund – In this the fund manager invests in small and new companies like Tanla Platforms, KPIT Tech etc. It has higher risk but the profit is also higher in the long run.
• ELSS (Tax Saving Fund) – This is a tax saving mutual fund which has a lock-in period of 3 years i.e. you cannot withdraw money from it for 3 years. It is meant for those who want a discount in tax and also a return like mutual fund.

✅ Suitable for whom?
Those who want to make long-term investment and want high return.

2️⃣ **Debt Mutual Funds –In debt mutual funds, fund managers invest in government bonds, fixed deposits, and loan-based securities. In this, the risk is also less, but the return is also limited.➡️ Example:

• Liquid Fund – If you don’t want to do FD then liquid fund can be a good option for you.
• Corporate Bond Fund – In this the fund manager invests in bonds of private companies.
  In return one gets a fixed return.
• Gilt Fund – In this it invests only in government bonds (safe investment).

✅ Suitable for whom?
Those who want less risk and prefer fixed income**.

3️⃣ **Hybrid Mutual Funds – These are the funds in which the fund manager invests in both stocks and bonds. In this the risk is medium and gives balance return. There are two categories in this also.➡️ Example:

• Aggressive Hybrid Fund – In this the number of shares is more and the number of bonds is less.
• Conservative Hybrid Fund – In this the number of bonds is more and the number of shares is less.

✅ Suitable for whom?
Those who want balanced risk and return.

4️⃣ **Index Funds –

it is also called passive fund because it follows some index like Nifty 50 etc. Risk is moderate because it depends on the trend of the market.For example

• Nifty 50 Index Fund – invests in top 50 stocks of Nifty 50.

✅ Suitable for whom?
Those who want low-cost and long-term investment.

5️⃣ Sectoral & Thematic Funds

In such mutual fund, fund manager invests in stocks of a particular industry or theme, in this the risk is high because it depends only on one sector. ➡️ Example:

• IT Fund – Invests in IT companies like Infosys, TCS.
• Banking Fund – Invests in banking stocks like HDFC Bank, SBI.

✅ Suitable for whom?
Those who expect high growth in a particular sector.