23 June 2022 2:48

Are mutual funds a good choice for a medium to low risk investment with a two year horizon?

How long should be your investment horizon?

Investors who are less risk-averse and not looking for cash for retirement or a large purchase are better suited to a medium-term investment horizon. This usually means a period of three to ten years.

Are mutual funds considered low risk?

Mutual funds are typically less risky than investing in just stocks. However, the level and type of risk depends on what types of investments are in a particular mutual fund.

What does a mutual fund do to make it a low risk investment?

Diversification or “Don’t put all your eggs in one basket.” Mutual funds typically invest in a range of companies and industries. This helps to lower your risk if one company fails. Affordability. Most mutual funds set a relatively low dollar amount for initial investment and subsequent purchases.

Which mutual fund is best for medium term?

List of Medium Duration Mutual Funds in India

Fund Name Category 1Y Returns
SBI Magnum Medium Duration Fund Debt 2.6%
HDFC Medium Term Debt Fund Debt 2.8%
Axis Strategic Bond Fund Debt 3.8%
L&T Resurgent India Bond Fund Debt 2.5%

How long is medium time horizon?

five to ten years

The medium-term investment horizon typically refers to investments of five to ten years, such as people saving for a child’s college education.

How long is medium term investment?

What is the Medium Term? A Medium-term is a term used in investment to describe an investment holding period of between 1 to 3 years. The time horizon in a medium-term investment is intermediate, the investor is expected to receive the return on investment and the initial capital within 1 to 3 years.

How long should I invest in mutual fund?

If you are actually looking at equity funds to help you achieve your long term goals then you at least need to give yourself a holding period of 8-10 years. For debt funds, the outlook on rates should be your key driver for holding period.. Unlike equity funds, the debt funds do not really depend on long term holding.

Which mutual fund has lowest risk?

List of Best Low Risk Mutual Funds in India Ranked by Last 5 Year Returns

  • Quant Multi Asset Fund. …
  • ICICI Prudential Equity & Debt Fund. …
  • ICICI Prudential Multi Asset Fund. …
  • Edelweiss Aggressive Hybrid Fund. …
  • Baroda BNP Paribas Aggressive Hybrid Fund. …
  • Edelweiss Balanced Advantage Fund. …
  • Canara Robeco Equity Hybrid Fund.

Are high risk mutual funds worth it?

Long-term capital appreciation: High risk mutual fund performs best over 5-7 years, which is why they are considered suitable for long-term financial goals. Also, these funds are adept at generating inflation-adjusted returns.

How many mutual funds should you invest in?

Unless you are very well versed with the markets and have expert knowledge about mutual funds, a good rule of thumb would be to own: Large cap mutual funds: Up to 2. Maybe 3 at best. Beyond that, it doesn’t make sense as there will be a great overlap in the shares owned by your mutual funds.

How do I choose the best mutual fund?

Here is a guide to mutual fund investment, you may consider while selecting mutual funds for investments.

  1. Goals. This is the basic. …
  2. Risk. Risk comes from not knowing what you are getting into. …
  3. Fund Performance. Fund performance matters. …
  4. Expense Ratio. …
  5. Entry And Exit Load. …
  6. Taxes. …
  7. Direct Plans.

Who should invest in medium duration funds?

Who should invest in Mid Term Duration Funds? A medium term plan is suitable for investors with low to medium understanding of risk. Also, investors with a medium duration horizon of 3-4 years can consider these funds as an option.

What are medium to long duration funds?

Medium to Long Duration Fund : These mutual funds select bonds/debt for investment such that average maturity (remaining) period for portfolio is between 4 to 7 years (Macaulay duration). Longer duration funds may provide higher returns but are more sensitive to interest rate changes.

What is medium duration mutual fund?

Medium Duration Funds invest in debt securities and money market instruments so that the Macaulay Duration of the fund’s portfolio is between three and four years. Hence, these funds are recommended to conservative investors with a four-year investment horizon.

Which is best Low duration fund?

Frequently asked questions

Fund Name Fund Category 5 Year Return (Annualized)
Aditya Birla Sun Life Low Duration Fund Debt 7.03 % p.a.
Axis Treasury Advantage Fund Debt 6.72 % p.a.
HDFC Low Duration Fund Debt 6.68 % p.a.
Canara Robeco Savings Fund Debt 6.02 % p.a.

What is a medium term?

Definition of medium-term
: lasting for a period of time that is neither long nor short Our short-term prospects are grim and our medium-term prospects are uncertain, but our long-term prospects are good.

Where should I invest for medium term goals?

Investment strategies for mid term financial goals

  • Savings accounts. Savings accounts might not be sexy, but they’re reliable, simple and virtually risk-free. …
  • Certificates of deposit. …
  • Bond index funds. …
  • Stock index funds. …
  • Target date funds or all-in-one funds.

What should I invest in for intermediate term?

If you’re investing for short- or intermediate-term goals, here are the key steps to take.
Here’s an overview of the key investment types that make sense over your short time horizon:

  • Checking and savings accounts.
  • Money market deposit accounts.
  • Certificates of deposit.
  • Online savings accounts.
  • Money market mutual funds.

Where is the best investment for short term?

Best Short Term Investments Options

  • Recurring Deposits.
  • Money Market Account.
  • Debt Instrument.
  • Bank Fixed Deposits.
  • Post-office Time Deposits.
  • Large Cap Mutual Funds.
  • Corporate deposits.