Other Mutual Funds India - 2025 Guide
Other Mutual Funds India 2025 - Ultimate Guide. The mutual funds in India have acquired great popularity as an investment instrument among every kind of individual. Although equity mutual funds and debt funds take up the largest share of attention, there is an increasing interest in the so-called Other Mutual Funds, which is a heterogeneous group that includes hybrid, solution oriented funds, fund of funds, index funds, international funds, etc. The purpose of this guide is to review in detail the other mutual funds in India, their main characteristics, types, advantages, risks, and professional opinion, which are applicable in 2025.
What are Other Mutual Funds India?
Other mutual funds can be referred to schemes that do not necessarily fall under either the equity or debt funds. These are some of the types of funds, which include hybrid or balanced funds, solution-oriented funds (retirement funds and kids funds), fund of funds, index funds, exchange-traded funds (ETFs), and international mutual funds. Because they have some of the aspects of equity, debt or international markets they are offered special benefits to the investors and can be incorporated in diversification strategies.
Key Features or Highlights
- Merges two or more asset classes.
- Offers answers to particular financial objectives.
- Open to both novice and experienced investors.
- Provides both active and passive management opportunities.
- Domestic and international market exposure options.
- SIP (Systematic Investment Plan) and lump sum modes of investment.
Why Bother Investing in Other Mutual Funds?
The changing financial objectives, market environment, and risk-taking nature make investors seek schemes beyond the simple equity or debt investment. The rest of the mutual funds in India have been customized to suit these changing needs using its flexible and diversified designs.
Pros
- Diversification as a risk mitigation tool.
- Liquidity of distribution-hybrid, debt or even gold and foreign exchange.
- Appropriate to various investment periods.
- Specific investment, such as investment to fund children education or retirement.
Cons
- Minor increase in cost ratios in some classes such as Fund of Funds.
- Difficulty in familiarity with underlying assets.
- Unsuitable not always when the goals are very short-term.
The operation of Hybrid Mutual Funds
Hybrid mutual funds consist of a combination of asset classes predominantly equity and debt and occasionally even gold or REITs. The predominant ones in India are conservative hybrid funds (which are predominantly debt-based), balanced hybrid funds (equity and debt, almost equally), and aggressive hybrid funds (primarily equity). The capital assists in diversifying the risk of the portfolio.
Key Features or Highlights
- Invests in accordance with market movement and fund mandate.
- Rebalancing dynamically in options, with regular rebalancing.
- Appropriate to the moderate-risk-averse investors.
Pros
- Potential of superior adjusting returns.
- Beneficial to the investors who move out of the fixed deposit and into equity.
- Rebalancing as a matter of fact reduces emotion in investing.
Cons
- Risks of not doing so well in the bull markets than pure equity funds.
- Hybrid funds that are debt oriented can be less favourable to taxation.
Analyst Opinion: AMFI reports at the beginning of 2025 indicated that aggressive hybrid funds received more inflows as a result of the Indian market volatility- indicating an increased confidence in hybrid solutions.
People also ask
The question is what the difference is between hybrid and balanced mutual funds in India.
Reclassification of balanced funds under the hybrid schemes is now mainly covered in hybrid schemes with reclassification by SEBI, although the underlying principle is still a mix of assets.
What are Solution-Oriented Mutual Funds?
These are plans that have certain objectives such as higher education to children, marriage or retirement planning. The solution-oriented funds tend to possess a long-term lock in or the target goal achievement time.
Key Features or Highlights
- Expert managed goal-based portfolios.
- Typically have a recommended holding period of 5 years and above.
- May is advantageous on taxes in some aspects.
Pros
- Goal-orientedness when it comes to the realization of financial targets.
- Professional management: It makes sure that it is in line with long-term goals.
Cons
- Liquidity is inhibited by lock-in period.
- Short or medium-term returns can be seen to be lower.
People also ask
Is it possible to redeem a solution oriented mutual fund prior to lock-in.
Before the lock-in period, you can not redeem; you are not allowed to get out before the end to maintain goal discipline.
What is the difference between Index Funds and ETF Schemes?
Both index funds and ETFs strive to track the performance of a certain index of stock markets such as the Nifty 50 or Sensex. The fundamental distinction is in trading and expense ratios.
Key Features or Highlights
- Passive management organization.
- Less cost ratio as compared to actively managed funds.
- ETFs were traded on exchanges all day long, index funds were priced once a day.
Comparison Table
| Feature | Index Funds | ETFs |
|---|---|---|
| Expense Ratio | 0.10% - 0.50% | 0.05% - 0.25% |
| Liquidity | End of day NAV | Day by Day intraday in BSE/NSE. |
| Minimum Invest | No less than [?]100 | Typically 1 unit value. |
Pros
- Cheaper than active mutual funds.
- Open portfolio construction.
- Reduced chances of human error in management.
Cons
- No possibility of outperforming the market (index only)
- ETFs need the services of a stockbroker.
Did you know: In 2025, the inflows of index and ETF funds increased more than 40 percent with low cost funds being popular as investors opted to ride the market ups and downs.
What are the Fund of Funds and International Funds?
A fund of funds (FoF) is an investment that invests in other mutual funds, whereas international funds offer exposure to global shares, bonds or other asset classes, either directly or through overseas FoFs.
Key Features or Highlights
- Portfolio diversification amongst fund houses or nations.
- Fewer clicks on the part of investors as opposed to the picking of individual schemes.
- Markets not accessible directly in India.
Pros
- Disperses risk both horizontally in fund strategies and geographies.
- Applicable to the thematic and worldwide investment themes.
Cons
- Increased ratio of expense as a result of two-layered of management fees.
- International fund currency risk.
People also ask
Should FoF be preferred to direct investment in international mutual funds?
The FoFs are easy to use, whereas larger sums may be cheaper to do through direct international funds.
What are Thematic and Sectoral Mutual funds?
Theme and sector funds focus on certain areas of industry like IT, pharma, banking, or certain investment topics such as ESG, infrastructure, or consumption. The performance of these is closely related to the returns in these sectors.
Key Features or Highlights
- Specialization in selected industries or topics.
- High- returns possibility in case the sector performs well.
Pros
- Room to take advantage of industry-specific growth.
- Thematic diversification in portfolio.
Cons
- Very risky in case of poor performance by the sector or theme.
- This is not a fit among the conservative investors.
Expert View: ESG-themed funds still prevailed in the 2025 because of regulatory push and increasing awareness on sustainable investing.
The Importance of picking the Right Other Mutual Fund
The selection of the appropriate mutual fund between equity and debt is a choice that you make based on your investment objective, the risk level that you take, investment horizon and product knowledge.
Considerations
- Financial objective- short, medium or long term.
- Age, income and tax situation
- Ready to make sectoral or market timing risk.
- Needs in terms of portfolio diversification.
People also ask
Should other mutual funds be added to my SIP further?
Yes, a combination of classes is able to maximize returns and assist in achieving various financial objectives.
How do other mutual funds fair with regards to the tax implications?
The taxation is different in relation to the underlying asset mix and fund structure.
Key Points
- Taxation of hybrid funds is based on equity-debt ratio (>65 percent equity is taxed as equity fund).
- The funds of funds and international funds are taxed as debt funds in India.
- Solution-oriented funds are subject to equity taxation with the lock-in requirement.
Recent Trends and regulatory developments in 2025
SEBI has remained in 2025 to concentrate on transparency, educating investors and proper fund classification. Passively managed funds, global exposure, ESG and retirement-oriented funds are on the increase demand. Investment based on technology such as robo-advisors and DIY platforms are also becoming more common and it is now easier to access such types of funds.
Table of Pros/Cons Other Mutual Funds
| Category | Pros | Cons |
|---|---|---|
| Hybrid Funds | Reduction of risk, stability of the returns, moderate returns. | |
| Solution-Oriented | Goal-oriented, disciplined investing | Less flexible, lock-in. |
| Index Funds | Cheap and easy to follow | No outperformance. |
| ETFs | Inexpensive, liquidity | Brokerage fee, demat must. |
| Fund of Funds | Easy diversification, access | Greater costs. |
| International Funds | Global exposure | Currency risk, taxes. |
| Sectoral or Thematic | High potential returns | High risk. |
Did you know: Regarding India, the total amount of the assets of Other Mutual fund was [?]5.2 lakh crore in 2025, which constituted about 17 percent of the total AUM of the mutual funds.
Often Neglected Proposals of other mutual funds
- Fund of funds may have more expenses in terms of stacked fees.
- Solution-oriented funds do not have ELSS tax benefits on all.
- The historical performance of international funds can not be replicated because of global and currency changes.
- Risks of the other mutual funds.
Risks of the other mutual funds
Risks that an investor should take into account include:
- Market risks (local and international).
- International fund volatility in currency.
- Thematic funds concentration risk in the sector.
- Performance in actively managed hybrids Fund managers.
People also ask
Are there other mutual funds that are safe enough to use as a first-time investor?
The beginners can use hybrid or index funds, but sector/thematic or international funds demand experience and knowledge.
TLDR or Quick Recap
- The other mutual funds are spread far apart in India, besides the common equity or debt-based funds, e.g. hybrid, solution-oriented and index funds, fund of funds, as well as ETFs, international and thematic funds.
- They aid in diversification of investments, matching of life objectives and exploiting on global and sector opportunities.
- These should be always in line with the risk profile, financial objective and investment horizon of an investor.
Other Mutual Funds India are also enquired by people
Q1: What kind of other mutual fund is most appropriate to use in retirement planning in India.
A1: Solution oriented retirement funds have been designed to build retirement corpus and are professionally managed and lock-in.
Q2: Is it possible to have index funds and international funds on my portfolio?
A2: Yea, there is low cost passive domestic growth and global diversification, which is good in a balanced strategy in this combination.
Q3: Minimum investment in these funds in 2025
A3: SIPs are affordable and can be initiated in most mutual funds with as low as [?]100 to [?]500 monthly, which makes it affordable to everyone.
Q4: Are other mutual funds tax advantaged?
A4: Tax advantages on solutions funds are only provided to a few solution-oriented funds, and the rest are taxed on the underlying asset allocation.
Sources
- Association of Mutual Funds in India (AMFI)
- SEBI Mutual Fund Classes
- Reserve Bank of India (RBI) Data
