What is Mutual Fund Scheme?

What is Mutual Fund Scheme?

The various variants/versions of a mutual fund are referred to as a scheme.

For instance, a mutual fund can provide a direct plan, a standard plan, a dividend plan, and so on.

When it comes to investments on new platforms, most people opt for the direct-growth scheme without noticing there are other options available in the same mutual fund.

However, since this scheme, direct – growth, is the most desirable for the majority of buyers whereas the success of the other schemes is not as strong.

For example:

Mutual fund name: XYZ large-cap fund

Different schemes names of this mutual fund:
XYZ large-cap fund – direct growth
XYZ large-cap fund – direct dividend
XYZ large-cap fund – regular growth
XYZ large-cap fund – regular dividend, etc.

Growth and dividend – these are two versions of the same mutual fund. But both handle dividends differently.

The dividends earned by the mutual fund’s stocks are reinvested in the mutual fund in the case of growth mutual funds. This allows your money to increase even faster.

When it comes to dividend mutual funds, fund managers try to pay investors regular dividends at regular periods.

Conduct a comprehensive study to determine which plan is appropriate for you; nevertheless, it should be noted that most clients will benefit from a growth plan.

So, one mutual fund can have several distinct versions, which is a nice way to comprehend this. These variations are referred to as schemes.

Most mutual funds provide a variety of schemes.

Debt mutual funds sometimes contain more than ten different plans!

The usual number of schemes in an equity mutual fund is four.

Mutual fund start date

The date on which a fund’s NFO becomes available as a mutual fund is known as the mutual fund launch date.

The mutual fund company collects deposits from investors in the form of NFO investments before the start date of Mutual fund.

Types of Mutual funds

Mutual funds are broadly categorized based on where they invest.

There are many categories and subcategories.

The three main categories are:

  • Debt mutual funds: invests in fixed income securities like bonds. It can be further divided into various types.
What is Mutual Fund Scheme?
What is Mutual Fund Scheme?
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