No, this is not necessary. Mutual funds can be divided into various types depending on asset classes. They can also invest in debt instruments such as bonds, debentures, commercial paper and government securities apart from equity.
Every mutual fund scheme is bound by the investment objectives outlined by it in its prospectus. The investment objectives specify the class of securities a mutual fund can invest in. Based on the investment objective, the following types of mutual funds currently operate in the country.
- Growth Schemes
- Income Schemes
- Balanced Schemes
- Money Market Schemes