Mutual funds, mutual fund investment, invest in mutual funds, how to invest in mutual funds, types of mutual funds, calculate mutual fund returns.
Almost all individuals are quite familiar with mutual fund investments and the benefits it offers to their investors. With so many types of mutual funds available to an investor, an investor can easily get overwhelmed with the wide variety of choices offered to them.
How To Invest In Mutual Funds?
Picking up the right mutual fund investment type. Picking the right type of investment is essential that supports your investment portfolio and suits your investment needs.
Are you someone who wants to invest in mutual funds and is looking for some external help in choosing the proper mutual fund schemes categories for your portfolio?
Don’t worry. We have got you covered.
How To Pick The Right investment Terms?
You want to invest in mutual funds. But how? The first thing you have to know is the investment policy and terms. On the basis of the investment policy and terms, you have to know which investment type is appropriate for you.
Here are the three different types of mutual fund investments that promise you a better return.
Also, we have considered different types of investors – risk-averse investors, aggressive, and balanced investors while jotting out the mutual funds investment plans for you.
1. Mutual Funds Investment Plans For 1 Year
Equity funds might not be a suitable investment option for investors with an investor with an investment horizon of 1 year. You might consider sticking to fixed-income securities such as debt funds.
Here’s what you can invest in mutual funds on the basis of your risk appetite for an investment horizon of up to 1 year.
- If you are a conservative or a risk-averse investor – liquid funds
- If you are an aggressive investor – ultra-short duration funds, liquid mutual funds, arbitrage funds (more ideal for investors belonging to the higher tax slabs)
- If you are a balanced investor – Ultra-short duration funds, liquid mutual funds
2. Mutual Funds Investment Plans For 3 Years
Similar to the above mutual fund scheme categories for investing in mutual funds, for an investment horizon of up to 3 years, you must consider investing mainly in debt securities. Here’s what you can consider supporting on the basis of your risk profile for the horizon of 1 to 3 years
- If you are a conservative or a risk-averse investor – arbitrage funds, liquid mutual funds, ultra-short invest in mutual funds duration funds
- If you are an aggressive investor – conservative hybrid funds, ultra-short duration funds, arbitrage funds, low duration funds
- If you are a balanced investor – arbitrage funds, low duration funds, ultra-short duration debt funds, money market funds
3. Mutual Funds Investment Plans For 5 Years
An investor can choose to indulge in some level of risk for investments with a duration of three to five years, depending on your risk profile. Let’s explore the different types of mutual funds suitable for an investor with varying risk appetites.
- If you are a conservative or a risk-averse investor – Banking and PSU funds, ultra-short duration bond funds, conventional hybrid funds
- If you are an aggressive investor (for debt portion) – corporate bond funds, ultra-short duration funds, money market mutual funds
- If you are an aggressive investor (for equity portion) – large-cap funds, aggressive hybrid funds, Flexi cap funds
- If you are a balanced investor (for debt portion) – banking and PSU funds, ultra-short duration funds, money market mutual funds, low duration funds
- If you are a balanced investor (for equity portion) – aggressive hybrid funds
The above listing is in no way a definitive indicator of promising returns for the above-said investment duration and ways to invest in mutual funds.
Conclusion:
As an investor, it is your duty to do your research and invest in mutual funds that align with your risk profile, financial goals, income level, and investment horizon. And before p[urcahsining any policy and terms, it is better to look at the terms and conditions of the mutual funds and do some research about the policies. Happy investing!
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