Mutual Funds are Collective Investment Schemes (CIS) as per NBFC Rules and Regulations. Mutual fund schemes can be classified as follows:
Open-ended schemes: An Open-end Fund is one that is available for subscription all through the year. These do not have a fixed maturity. Investors can conveniently buy and sell units of the Funds from the Asset Management Company (AMC) at the related prices commonly known as Net Asset Value (“NAV”).
Close-ended schemes: A Close-ended Fund is open for subscription only during a specified period. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the Stock Exchanges where they are listed.
786 Investments manages open-ended schemes categorized into following Investment Objectives:
1. Income schemes: The aim of Income Funds is to provide regular and steady income to investors. Such schemes generally invest in fixed income securities such as bonds, TFCs, corporate debentures and Government securities. Income Funds aim to provide capital stability and regular income. These are considered low risk schemes.
2. Asset Allocation Schemes: The objective of Asset Allocation Funds is to generate regular income by investing in Debt & Money Market securities and to earn capital appreciation by investing in equity and equity related securities. Investment guidelines of this scheme are flexible to maximize the upside and protect the downside of the capital market movements.
3. Balanced schemes: The aim of Balanced Funds is to provide both growth and regular income. Such schemes invest both in equities and fixed income securities in the proportion indicated in their offering documents. These are ideal for investors looking for a combination of income and moderate growth. These are considered medium-risk schemes.