Equity Funds – Invest primarily in stocks and aim for capital appreciation. They are ideal for long-term investors willing to accept market volatility. Debt Funds – Focus on fixed-income securities like government bonds, corporate bonds, and money market instruments. They offer relatively lower risk and stable returns. Hybrid Funds – Combine equity and debt investments to balance risk and return. Examples include balanced funds and asset allocation funds. Index Funds – Passively track a market index, such as the S&P 500, with lower fees and minimal management. Sectoral & Thematic Funds – Invest in specific industries like technology, healthcare, or infrastructure. They carry higher risk due to sector concentration. Money Market Funds – Invest in short-term debt instruments, providing high liquidity and relatively low risk.