What Is Investment Funds?

Investment is a process through which we make our money into something that provides us returns at regular intervals. The best way to invest is when you have the opportunity to earn money with no additional efforts.

There are different types of investment funds that you can choose from to invest. These funds can be used for different purposes. Here, we will talk about the different kinds of investment funds and its basic characteristics.

Investment Fund

This is the largest and broadest term used in the investment field. A fund is basically a pool of money invested by an individual or a group of people. Every investment fund is made up of different types of investments, which provide a continuous income stream. You can choose any kind of fund, based on your risk appetite.

1. Equity Funds – these are funds that contain shares of companies.
2. Fixed Income Funds – these are funds that contain fixed interest rate bonds, debentures, commercial papers and treasury bills.
3. Hybrid Funds – these are funds that mix stocks and bonds and have a variable or stable return.

Types Of Investment Funds

Funds are broadly classified into two categories:

1. Equity Funds – these are funds that contain shares of companies.
2. Fixed Income Funds – these are funds that contain fixed interest rate bonds, debentures, commercial papers and treasury bills.

You Can Invest In The Following Types Of Funds:

1. Index Mutual Funds – these are funds that follow a particular index.
2. Growth Funds – these are funds that make long-term bets on companies that have the potential to grow rapidly.
3. Value Funds – these are funds that make short-term bets on stocks.
4. Dividend Funds – these are funds that focus on maximizing the yield on dividends.
5. Emerging Markets Funds – these are funds that focus on identifying emerging markets.
6. Real Estate Funds – these are funds that invest in real estate.
7. Income Funds – these are funds that provide returns on the basis of capital gains.
8. Balanced Funds – these are funds that try to maintain a balance between long and short positions.
9. Global Funds – these are funds that focus on countries that have a high GDP.
10. International Funds – these are funds that focus on international stocks.
11. Convertible Bonds – these are bonds that offer the option of converting them to stock shares.
12. Unit Trusts – these are funds that contain shares of companies.

Conclusion:

In this blog, I have covered the basic types of investment funds. You can get information about these types of funds by visiting online brokers. You can buy the shares of a company at a low price, and sell them at a higher price.

If you are planning to invest, make sure that you use the right type of fund, as there is a difference in the return of each. You can invest your savings in any of these funds to get returns.