What are the 4 types of funds?

When we talk about the “types of funds”, it can depend on context—like investments, accounting, or government finance—but generally in finance and investing, there are four main types of funds:

1. Equity Funds (Stock Funds)

   • Invest primarily in stocks of companies.

   • Aim for capital growth over the long term.

   • Higher risk, but potential for higher returns.

2. Debt Funds (Bond Funds)

   • Invest in fixed-income securities like bonds, debentures, or government securities.

   • Aim for regular income and capital preservation.

   • Lower risk compared to equity funds, but generally lower returns.

3. Hybrid Funds (Balanced Funds)

   • Invest in a mix of equities and debt instruments.

   • Aim to balance risk and return.

   • Suitable for moderate risk investors.

4. Money Market Funds (Liquid Funds)

   • Invest in short-term, highly liquid instruments like treasury bills, commercial paper, or certificates of deposit.

   • Aim for capital preservation and liquidity.

   • Low risk, but usually lower returns.

💡 Quick tip:
Think of it this way—equity = growth, debt = safety, hybrid = balance, and money market = liquidity.