Fund Categories help in differentiating mutual funds on the basis of factors such as scheme objective, core investment criteria or features, method of funds management etc. This detailed categorization enables investors to choose the right funds or schemes as per their financial goals.

Additionally, it helps them to balance their overall portfolio by doing a proper mix and match of various funds categories.
Mutual Funds can be categorized on the basis of their:-

Asset Class

1. Equity Funds
2. Debt Funds
3. Liquid Funds
4. Hybrid Funds ̥

Type of fund management

1. Active funds
2. Passive or Index funds

Structure

1. Open ended funds
2. Close ended funds
3. Interval funds

Investment objective

1. Tax saving funds
2. Growth funds
3. Income funds
4. Capital protection funds
5. Fixed Maturity Funds (FMPs)̥
6. Risk categories
7. High risk funds
8. Medium risk funds
9. Low risk funds
10. Very low risk funds

Other specific objective funds

1. Sectoral funds
2. Fund of funds
3. Emerging market funds
4. Real estate funds
5. International or global funds
6. Asset Allocation funds
7. Exchange traded funds, etc

Equity Funds can be further categorized according to their Market capitalization like:-

1. Large Cap funds
2. Mid cap funds
3. Small cap funds
The most common types of fund categories are equity funds, debt funds, balanced funds, liquid funds, etc.