• These are open only during a specified period.
• The units of a closedended scheme have a fixed maturity period. This can vary from 3
to 15 years. An individual investor can move into and out of the investment, but the unit
• After the initial offer, a closedend fund is listed on a stock exchange and, thereafter,
investors can purchase and sell these units only through the stock exchange.
• CloseEnded schemes generally trade at a discount to the NAV, but the discount narrows
as the date of maturity approaches.
Growth or Equity Fund
• A Growth Funds objective is to provide the maximum returns through capital
appreciation, over the medium to long term, by investing in equities. An equity fund may
be of a diversified nature, or may be sectororiented. Equity Funds have often given
excellent dividends when stock markets have risen sharply.
• This is aimed at maximizing current income (interest and dividend) of investors. It is a
scheme that is typically debtoriented, which provides interest at regular intervals and has
limited downside. Capital appreciation in such a scheme is generally less than in a pure
equity fund. Income schemes normally provide higher returns than Bank Fixed Deposits.
Many income schemes invest about 15% of the corpus in equities, as a result of which
they have the potential to provide much higher returns than a pure bond fund.
• Balanced funds are funds that invest both in shares and fixed income securities in the
proportion indicated in their offer document. The returns to investors provided by these
schemes are moderate and at a moderate risk. A typical equity/debt mix in a balanced
fund could be 40:60.
• A sector fund is one whose portfolio is built around a particular sector or theme. It could
be appropriate for an investor who lacks expertise or knowledge about a particular sector.
Some of the recent sector funds floated have included those focusing on the information