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Mutual Funds  are categorized into various categories of funds in India like equity fund, debt fund, and hybrid fund which helps investors in wealth creation. Besides these one more category of a mutual fund is there that is, SOLUTION ORIENTED MUTUAL FUNDS! 

These kinds of funds are specially designed to help investors achieve composite goals like retirement planning, child education, and others. 

Let us know about SOLUTION ORIENTED MUTUAL FUND in detail!  


What Are Solution-Oriented Mutual Funds?  

The Securities Exchange Board of India has divided mutual fund schemes into five primary categories, one among them is, Solution Orientation Mutual Funds. Under these funds, investors get the benefit of choosing already customized portfolios based on the risk and primary goal of an investment. 

Fund managers of solution-oriented mutual fund schemes, take into consideration, the financial goals, the expected returns, and risk aptitude of investors, to decide the portfolio allocation and generate high returns as per expectations. 


Key Features Of Solution-Oriented Scheme!  

  1. Solution-Oriented Mutual Fund Schemes are designed in such a way that they are associated with specific financial goals. These funds help create wealth to overcome huge financial expenses that may arise in the future like retirement, child education, marriage.  
  2. Some Solution-Oriented Scheme also offers tax-saving benefits. The funds invested in Equity funds have a lock-in period of 5 years. Hence, under section 80C the taxable income can be reduced by a maximum of Rs. 1.5 Lakh.  
  3. These funds or schemes are close-ended mutual funds that mean investors can redeem these funds only after a certain period and not instantly any time.  
  4. There is a minimum lock-in period of 5 years. Hence, one cannot withdraw investments made in these mutual fund schemes before a period of 5 years. 


Types Of Solution-Oriented Mutual Funds!   

As mentioned above, these funds are associated with specific financial goals, thus SEBI has divided these funds into two categories or types. The types of solution-oriented schemes are: 

Retirement Funds- 

AMC’s offer systematic investment plans to invest in such mutual funds, where the amount can be used to invest systematically in either debt fund or equity fund as per investors risk profile.  

Such funds come with a mandatory lock-in period of 5 years, that too with no premature withdrawals. This strict and long lock-in period, keep the corpus for a long time for maximum gains.  

Children’s Gift Fund- 

As the expense of education in India is increasing with leaps and bounds, it has become very necessary to save for the education of the children. Thus, proper planning and necessary steps are taken at the right time may help overcome these difficulties. 

Returns generated through such schemes or funds can be used to fund higher education expenses or marriage (child) expenses.  


Who Should Invest In Solution-Oriented Mutual Funds? 

Solution-Oriented Funds are customizable as per the future financial requirement of an investor. These funds are long-term income funds. This fund helps in building a corpus which further ensures adequate capital for a specific objective.  

However, before investing in solution-oriented mutual funds the investor should have sufficient liquidity of capital. In these funds, a partial withdrawal option is not available before the completion of 5 years. The investment duration in these funds should be higher to allow the fund to grow.  


To get more details about you can get in touch with us. Call us on- 0612-6604453 or mail us at- [email protected]. 

For any kind of query, you can contact us at Shri Ashutosh Securities Pvt Ltd., we are here to help you in any way possible. 


Happy Investing! 


(Mutual Fund investments are subject to market risk Illustrations are for example only, there is no guarantee of returns. Past performance is not an indicator/guarantee to future returns).