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    Question

    Which among the following funds of the mutual fund

    invests primarily in other schemes of the same mutual fund or other mutual funds?
    A Index Funds Correct Answer Incorrect Answer
    B Balanced Funds Correct Answer Incorrect Answer
    C Fund of Funds Correct Answer Incorrect Answer
    D Gilt Fund Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    Open-ended scheme of the mutual fund is the one that is available for subscription and repurchase on a continuous basis. Its key feature is liquidity and these do not have fixed maturity periods. Close-ended mutual fund scheme has stipulated maturity period and is open to subscription only during a specified period of time of launch of the scheme. The aim of the growth funds under mutual fund has an aim to provide capital appreciation over medium-to long term period. Such schemes invest majorly in equities. Income scheme has an aim of providing regular and steady income to investors and generally invest in fixed income securities. Balance fund scheme of the mutual fund are used to provide both growth and regular income. Gilt Fund of the mutual fund invest exclusively in government securities. Index funds replicate the portfolio of a particular index such as the BSE sensitive index, Nifty etc. Fund of Funds scheme of the mutual fund invests primarily in other schemes of the same mutual fund or other mutual funds.

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