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Definition: Categories in the context to financial markets are asset classes where an investor can invest. There are various categories to invest in such as debt instruments, equity instruments and a portfolio of both.
Description: Categories in context to mutual funds can be classified into equity fund, debt fund or hybrid funds with equity funds being classified by size (Large Cap Stocks, Mid Cap Stocks, Small Cap Stocks) and by investment styles like investing in a growth stock like a small company stock which possesses greater risk leading to greater returns.
Other investment style includes investing in a value stock like large company stocks which are relatively less risky and hence provide lesser return. Similarly in the debt or fixed income instruments, the bonds can be categorized by maturity and credit rating risk. Hybrid funds can be a mix of equity and debt with a higher orientation towards any one commensurate with the investment objective.
Also See: Mutual Funds, Investment Objective, Hedge Funds, Index Funds, ETF
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