LIVE TV
ZEE Business
ZEE BUSINESS
हिंदी में पढ़ें  हिंदी में पढ़ें
Live TV
Live TV
  • Home
  • Budget 2021
  • Personal Finance
    • PPF
    • Mutual Funds
    • Income tax
    • EPFO
    • Income Tax Calculator
    • Personal Loan Calculator
    • Car Loan Calculator
    • Home Loan Calculator
    • SIP calculator
    • SWP Calculator
    • MF Returns Calculator
    • Lumpsum Calculator
  • India
    • Companies
    • Property
    • Startups
    • Uidai
  • Economy
    • Aviation
  • Tech
    • Mobiles
    • Apps
  • Auto
    • Cars
    • Bikes
  • Markets
    • Commodities
    • Currency
  • Jobs
  • Indian Railways
  • World
    • Economy
    • Politics
    • Markets
  • videos
  • photos
  • Authors
  • More ...
    • VIDEOS
    • PHOTOS
Read in App
Business News » Personal Finance News

Which mutual fund scheme is for you? Find out the safest harbor for your money!

The mutual fund industry is definitely a one-stop solution due to its  affordability, higher returns and minimal risk exposure. 

  • Twitter
  • Facebook
  • Linkedin
  • whatapp
  • View in App
Which mutual fund scheme is for you? Find out the safest harbor for your money!
Everyone wants a good investment that can provide hefty returns. Photo: PTI
Written By: ZeeBiz WebTeam
Updated: Tue, Jun 25, 2019
01:19 pm
Mumbai, ZeeBiz WebDesk
RELATED NEWS
How to become rich: Mutual Fund calculator says 10% annual step-up rate doubles your money How to become rich: Mutual Fund calculator says 10% annual step-up rate doubles your money
Gandhi Jayanti: 'Satya Vachan' motto will make you successful! Make your future better, invest now Gandhi Jayanti: 'Satya Vachan' motto will make you successful! Make your future better, invest now
SIP vs smart SIP: To get higher MF returns, this is what you should do SIP vs smart SIP: To get higher MF returns, this is what you should do
Want to invest in private banks? This ETF may help you earn BIG Want to invest in private banks? This ETF may help you earn BIG
Mutual Fund tips and tricks: What is Index Fund? How to invest?  Mutual Fund tips and tricks: What is Index Fund? How to invest?

Everyone wants a good investment that can provide hefty returns. But every investment is different and has its own pros and cons. One such is mutual funds, which is used by investors as a financial vehicle to invest in securities like stocks, debt, bonds and other assets. There has been a consistent rise in mutual funds market, with the latest numbers showing a rise of 5% in the industry AUM to Rs 25.9 lakh crore in May 2019 due to  inflows into liquid funds. The basic method of investing in mutual fund is through Systematic Investment Plans (SIP). These days, mutual fund investments almost like any other small saving schemes as the former can opened at a minimum price value of Rs 500. Also, because mutual fund are bucket of different securities, the investment here comes with lessor risk exposure compared to equities. While SIPs ensure discipline in the investment. 

That said, the mutual fund industry is definitely a one-stop solution due to its affordability, higher returns and minimal risk exposures. Since 2019, the   Indian markets have witnessed a turnaround in performance, after remaining subdued since the start of CY18. With that, momentum has been regained in the first of half of 2019 and many investment schemes are back near all-time highs.

Considering above, which mutual fund medium is best for investors let’s find out!

Equity Funds:

Sachin Jain, Research Analyst at ICICI Securities said, “Sector rotation is being seen with banking, infrastructure funds significantly outperforming in the recent uptrend. After the initial outperformance, midcaps/small caps have been under pressure. The pharma sector continues to underperform. We have been recommending infrastructure and banking funds since the start of CY19 as we believe that underperformance coupled with improved earnings growth outlook over the next two years make it well positioned to deliver a superior performance.”

“Investors who are wary of investing directly into equities can still get returns almost as good as equity markets through the mutual fund route,” said Jain. 

Equity Diversified funds:

According to Jain, multicap funds offer fund managers flexibility to allocate funds across all market segments. Therefore, they are relatively better placed from a long term perspective. Multicap funds should form the major portion of an investor’s equity allocation.

Investors may consider investing lumpsum amount in midcap/small cap funds from a long term perspective. 

Hybrid funds:

Over the last few months, inflows into aggressive hybrid funds have shown a consistent decline with May 2019 being the consecutive month which also faced hefty outflows to the tune of Rs 2481 crore. Between January to May 2019,  aggressive hybrid category has witnessed more than | Rs 10000 crore of outflow.

Jain said, “Volatile equity markets resulted in negative returns for the category while imposition of dividend distribution tax (DDT) on equity mutual funds in the last Budget dampened investor sentiments considerably in balanced funds. For the first time, Amfi has given category wise flows and AUM data. While aggressive hybrid funds (erstwhile balanced funds) continue to be the largest category, dynamic asset allocation funds have also grown significantly in the last few years."

Short-term debt allocation (investment horizon of less than a year):

“We believe ultra-short term funds and low duration fund categories offer a relatively better investment opportunity. Ultra short-term bond funds and low duration funds are an ideal option to park money temporarily compared to overnight or liquid fund categories. They offer higher return potential by investing a higher proportion in a mix of corporate bonds and commercial papers compared to overnight/liquid funds. At the same time, most funds in these categories do not have exit load restrictions, thereby making them liquid from an investors’ perspective.”

Further, he said, “Money market funds are also a worthwhile option from a liquidity and credit quality perspective, particularly for conservative investors. However, the return potential may be lower compared to ultra-short/low duration categories.”

Long term debt allocation (investment horizon of more than a year):

In Jain’s view, medium duration funds and credit risk funds categories offer a relatively better investment opportunity based on risk profile of investors. Short-term funds are also a worthwhile option for conservative investors. However, the return potential may be lower compared to medium duration and credit risk categories due to higher credit quality. 

In the medium duration category, many funds offer an optimum mix of credit quality along with higher return potential. Credit quality in this category is lower than short duration funds but higher than credit risk category, explained Jain. 

Therefore, choose your mutual fund picks wisely. Let every penny count!

Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.

TAGS:
best mutual fundsEquity Mutual FundsMF SIPmutual fund investmentELSS Mutual funds
RELATED NEWS
How to become rich: Mutual Fund calculator says 10% annual step-up rate doubles your money How to become rich: Mutual Fund calculator says 10% annual step-up rate doubles your money
Gandhi Jayanti: 'Satya Vachan' motto will make you successful! Make your future better, invest now Gandhi Jayanti: 'Satya Vachan' motto will make you successful! Make your future better, invest now
SIP vs smart SIP: To get higher MF returns, this is what you should do SIP vs smart SIP: To get higher MF returns, this is what you should do
Want to invest in private banks? This ETF may help you earn BIG Want to invest in private banks? This ETF may help you earn BIG
Mutual Fund tips and tricks: What is Index Fund? How to invest?  Mutual Fund tips and tricks: What is Index Fund? How to invest?

LATEST NEWS

Rakesh Jhunjhunwala stocks: This Big Bull-owned MULTIBAGGER has delivered more than 42 pct in less than two month

Life Insurance Coverage Calculator: Simple cover calculation in just 3 steps - EXPLAINED

Listing facilitation! Ahead of LIC IPO, authorised capital boost of Rs 25,000 crores - All you need to know

REVEALED! What gave a massive 400% jump to FDI in computer software, hardware during Apr-Dec 2020

Andhra Pradesh trade body to promote IP rights, registration for MSMEs

US continues to see drop in new Covid cases

Facebook removes 1,521 malicious accounts in Feb

West Bengal Elections: PM Narendra Modi launches blistering attack on Mamata Banerjee - Top quotes

Super hi-tech driverless pod taxis for Noida Aiport! Check Yogi Adityanath government's big plans for Jewar

Stock Market Outlook: Focus will be on these - Check what share bazaar experts, analysts opined

  • India News
  • World News
  • Companies News
  • Market News
  • Personal Finance News
  • Technology News
  • Automobile News
  • Small Business News
  • Income Tax Calculator
  • Live TV
  • Videos
  • Photos
  • Author
  • Rss Feed
  • Advertise with us
  • Privacy Policy
  • Legal Disclaimer

Latest Trending Updates

  • EPFO
  • Budget 2020
  • Income Tax Return
  • Auto Expo 2020
  • Home Loan
  • Business News

Trending Topics

  • Income Tax
  • income Tax Calculator
  • 7th Pay Commission
  • Reserve Bank of India
  • GST
  • Latest Business News

Follow us on

zeebiz
zeebiz

Partner Sites

  • Zee News
  • Hindi News
  • Marathi News
  • Bengali News
  • Tamil News
  • Malayalam News
  • Gujarati News
  • Telugu News
  • Kannada News
  • DNA
  • WION
Copyright © Zee Media Corporation Ltd. All rights reserved