Mutual funds can be categorized based on the type of assets in which the corpus is invested. These categories include equity, debt, balanced, tax saving, liquid, and others. Equity mutual funds invest primarily in stocks, while debt mutual funds focus on fixed income securities. Balanced mutual funds aim to strike a balance between equity and debt investments. Tax saving funds offer tax benefits, while liquid funds provide high liquidity and low risk. It is important to understand these categories in order to make informed investment decisions.
