Well in India, Mutual Funds are categorized based on various fundamentals. Funds to be fond of:
Equity Mutual Fund will invest your money in the stock markets. In plain english it belongs to stock mutual fund where returns on investments are purely based on stock performance. These funds are off the record best type of mutual fund in long run.
Debt Mutual Funds will invest your money in debt instruments like Treasury bills, Government Bonds, etc. These investments ensure you fixed rate of returns.
Balanced Mutual Funds will invest your money partially into equities and partially into debts. Investor prefers this sort of investment when they want to minimize the equity investment risk.
Sectorial Funds will invest you money as per your selected sector like IT, Banks, FMCG, Pharmacy, etc. Fund Manager control stocks trading based on your selected sectors preferences. Returns on investments are based on stock performance belonging from the specific sector.
ELSS or Equity Linked Savings Schemes are commonly known as Tax saving funds, Investment made towards ELSS funds are exempted from Income tax under section 80 C. However, ELSS funds have 3 years of lock-in period.
Open Ended Funds are funds that allow you to invest money and redeem anytime as per your needs and your strategies regardless of any time circumstances.
Close ended Funds are funds allowing you to invest with some lock-in period, mostly within 1 to 3 years, before that you cannot redeem the fund since there is a time constraint involved with it.