Question 1

Why invest in Solution-oriented Funds?

Accepted Answer

Since different asset classes reflect varying attributes across different periods, it becomes  crucial for the investors that their investments suit the investment horizon and their  financial goals. For example, equity funds, which tend to be volatile over the short term,  may not be considered suitable for short term financial goals. Further, it is advised that they  link their mutual fund investments with specific goals to continue saving towards their  financial goals. Solution-oriented schemes aim to bridge the gap for such investment needs.

Question 2

What are the different types of Solution-oriented Funds?

Accepted Answer

Following are the two types of solution-oriented mutual funds, as allowed by SEBI:    Retirement Fund – These are retirement oriented mutual fund schemes having a  lock-in period of 5 years or till retirement age, whichever is earlier.    Children’s Fund – These funds aim for investment for children having a lock-in period  of 5 years or till the child attains majority, whichever is earlier.

Question 3

Who should invest in Solution-oriented Funds?

Accepted Answer

Solution-oriented schemes aim to achieve the investment objectives towards specific  financial goals, which may range from retirement planning to a child’s education. As such,  the investors may consider investing in such solution-oriented schemes while planning for  such financial goals.

Solution Based Funds

Mutual Funds