Written by the Bini team · Last updated: October 2026
In Bangladesh, mutual funds are commonly grouped by strategy into growth funds, income funds, balanced funds and Shariah funds. Growth funds lean toward shares, income funds toward fixed-income assets, balanced funds mix both and Shariah funds follow Islamic investment rules.
1. Growth funds
Growth funds aim to increase the value of your money over the long run. They usually put more of the portfolio into shares, which have more growth potential but also bigger swings. A growth fund can look great in a rising market and uncomfortable in a falling one. Risk level: High.
They tend to suit people with a longer time horizon who can sit through dips.
2. Income funds
Income funds focus on assets that pay interest or regular returns, such as government securities and corporate bonds. Prices usually move less than a share-heavy fund, though they aren't risk-free. Interest rate changes and the credit quality of issuers can affect them. Risk level: Low.
3. Balanced funds
A balanced fund holds a mix of equities, bonds and cash. The idea is to get some growth while keeping the ride smoother than a pure equity fund. The exact split differs from fund to fund, so check the asset allocation. Risk level: Moderate.
4. Shariah funds
Shariah funds invest only in assets that meet Shariah requirements, like Shariah-compliant stocks, sukuk and Islamic FDRs. That usually means avoiding interest-based instruments and certain industries. The fund's documents should explain its screening rules and who oversees compliance. Risk level: High.
Structure is a separate question
Whether a fund is open-end or closed-end isn't a type. It's a structure and it affects how you buy and sell. A growth fund can be either. See open-end vs closed-end funds in Bangladesh for the details.
Which type should you pick?
There's no single right answer. Three things narrow the choice more than anything else.
- Your investment tenure. How long you can stay invested and what the money is for. Money you need in a year or two usually suits a lower-risk fund. Money for a goal many years away can ride out the swings of a growth fund.
- Your risk tolerance. How much price movement you can handle without panicking. Growth funds swing the most and income funds move more slowly. If you want regular income look at income funds and check each fund's dividend policy.
- Shariah compliance. If it matters to you choose a Shariah fund and read its documents for the screening rules and who oversees compliance.
Not sure where you stand on these? Ask Finance Buddy (opens in a new tab), Bini's AI assistant, to talk it through in simple language.
Then look past the label. Two growth funds can have very different portfolios, costs and track records.
What to compare before you choose
- The reputation of the AMC
- The people managing the fund
- Past performance record
- Fees and expense ratio
- Fund structure
Frequently asked questions
Which type of mutual fund is best for beginners?
There's no universal answer. Beginners often start with a balanced fund or a small SIP in a fund whose risk level they understand. The right pick depends on your goal and time frame.
Are growth funds riskier than income funds?
Yes. Growth funds are high risk because they hold more shares and share prices swing more than bond prices. Income funds are low risk. Check each fund's actual holdings.
What is a Shariah mutual fund?
A fund that only invests in assets that meet Shariah requirements, like Shariah-compliant stocks, sukuk and Islamic FDRs.