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Best Low Risk Mutual Funds

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Best Low Risk Mutual Funds

What is Low risk mutual fund? 

Low Risk Mutual Fund is a mainly debt instrument which has the lowest level of risk compared to other mutual funds. 

Why an investor chooses the Low Risk Mutual Fund?

There are multiple number of reasons to choose a low risk mutual fund. 

  • Capital protection: Low risk mutual fund provides better capital protection compared to other mutual funds. These mutual funds invest in government debts or bonds or securities, as they have minimum chance of defaulting on their returns. 
  • Stable returns: Low risk mutual provides stable average returns to their customers. Since, they have invested their money in less risky asset, the returns are always in between 5% to 10%. 

How to invest in low risk mutual funds? 

To invest in low risk mutual funds, an investor needs to follow these simple procedures: 

  • Sign in at Gulaq Account 
  • Enter all your credentials regarding the amount of investment and period of investment. 
  • Gulaq make sure that your e-kyc should be done in less than 5 minutes. 
  • Select from the list of low risk mutual funds and then invest your amount in the given funds. 

 List out the best low risk mutual funds: 

Here is the list of best low risk mutual funds to invest in 2019, according to economic times: 

  • Mirae Asset Tax Saver Direct G 
  • Motilal Oswal Long Term Equity fund direct Growth 
  • DSP Tax Saver Direct Plan Growth 
  • Aditya Birla Sun Life Tax relief 96  

Things to consider before investing in Low risk mutual fund 

Things to consider before investing in low risk mutual fund:  

  • Interest Rate Risk: Low risk mutual fund mainly invests in debt mutual fund. Interest rate dynamics have an impact on the total valuation of debt fund. A sudden rise in the interest rates results in a fall in the prices of bond and vice versa. But In case, if there is a falling interest rate period, then it translates into better earnings.  
  • Returns: Low risk mutual fund mainly provides stable and fixed returns. But on average these returns are between 5% to 10% on an annual basis. This is quite low compared to other form of investment options.  
  • Scheme Specific Risk: Low risk mutual fund primarily invests in debt or dynamic bond schemes are subject to specific risk. Sometimes the portfolio manager frequently changes the investment mix and tenure based on the interest rate movements. But in case, if the fund manager analysis goes wrong, the allocation can result in a loss.  

A low risk mutual funds can help investors to meet diverse financial goals such as alternate income source, or an investment option for moderate risk appetite investor who wish to earn good and stable returns other than fixed deposit. It offers flexibility to switch between funds, liquidity and decent returns. But before investing in it, one must look upon the credit rating of the portfolio composition.  

 

*Mutual fund investments are subject to market risks. Please read the scheme information and other related documents carefully before investing.

Rating: 4.9/5. From 11 votes.
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