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Low-Risk Investment in mutual funds
Many investors look ahead to investing in Mutual Funds. As these give greater returns and also are extra tax-efficient than other instruments like PPF. Low-Risk Investment in mutual funds are funds that invest at least 65% of the total corpus in debt securities such as government bonds, gold funds, fund of funds, and international funds, etc. Low risk usually turns to provide low returns. They do not have a fixed investment horizon. Also, a risk-averse investor never recommended investing in equity mutual fund, as they are extremely risky funds. When it proceeds to risk-averse investors, these are investors who are watching for reliable returns and can’t bear risk in investments. Debt fund is best for risk-averse investors who are willing to invest in Mutual Funds and its low-risk investment.
As mutual funds are a market-linked product, all of them constantly carry a risk factor. Still, the magnitude of risk involved varies generally depending on the types of mutual funds. The mutual fund investment that carries low-risk is liquid funds invest in short-term debt funds and carry low risk. They aim at forming optimal returns for a short duration. Thus a new investor who wants to earn good returns on their idle money in shorter security can invest here.
Lets’s have a closer look at the 7 mutual funds which is low-risk investments.
ICICI Prudential Ultra Short Term Fund
Launch Date: May 03, 2011
Riskometer: Moderate
To produce income by investments in a range of debt and money market instruments then invest in ICICI Prudential Ultra Short Term Fund. It is is an open-ended, ultra-short-term debt scheme. This fund is best for investors who are looking for short term regular income. At first, it was known as ICICI Prudential Regular Income Fund and was renamed as ICICI Prudential Ultra Short Term Fund on May 28, 2018.
There is a tax benefit of investing in ICICI Prudential Short Term Fund. The following taxes apply to income resulting from investing in this scheme.
1. Short Term Capital Gains from the debt element is added to the investor’s income and taxed as per the income-tax slab.
2. The long-term capital gain component is taxed at 20% with indexation profits.
| NAV | ₹19.49 |
| Fund Size / AUM | ₹5106 Cr |
| Expense ratio | 0.94% |
| Benchmark | CRISIL 10 Year Gilt Index |
| Min SIP Amount | ₹1000 |
| 1 Y return (%) | 8.51% |
| 3 Y return (%) | 7.78% |
| 5 Y return (%) | 9.08% |
Indiabulls Short Term Fund Direct-Growth
Launch Date: September 13, 2013
Riskometer: Moderate
The Scheme will aim to create stable returns over the short term with a low-risk strategy while managing liquidity by a portfolio including debt and money market instruments. The scheme aims to invest in a diversified portfolio of high-quality debt and money market securities to create stable risk-adjusted returns with a low-risk strategy. The Indian debt market is in a state of rapid transformation with liquidity and investment opportunities arising in many debt segments along with the opening of new instruments.
The fund manager will attempt to designate assets of the scheme within various fixed income securities to obtain optimal risk-adjusted returns. The Scheme would intend to profit from the softening in yields in foreseeable future as a financial easing of rates and liquidity takes place.
| NAV | ₹ 1701.9728 |
| Fund Size / AUM | ₹ 104.14 Cr |
| Expense ratio | 0.48% |
| Benchmark | CRISIL 10 Year Gilt Index |
| Min SIP Amount | ₹500 |
| 1 Y return (%) | 7.87% |
| 3 Y return (%) | 7.09% |
| 5 Y return (%) | 7.96% |
Axis Liquid Fund
Launch Date: Oct 09, 2009
Riskometer: Low
Fund size matters in case of debt funds because a large-sized mutual fund can operate a much larger number of debt securities and is not drastically hit by any error in any one bond. To give a high level of liquidity with consistent returns commensurating with low risk by a portfolio of money market and debt securities – Axis liquid fund is the best option to go for. Axis Liquid Fund is one of the top performers in the liquid fund’s category. It has led to delivering great returns in a very challenging year for liquid funds.
They invest essentially in money market instruments like CoD, treasury bills, commercial papers etc. Extremely liquid and low-risk investment option for investors. One can redeem up to 90% of the prevailing value of available units or a maximum of Rs. 50,000 every day, whichever is more moderate.
| NAV | ₹2120.87 |
| Fund Size / AUM | ₹30115 Cr |
| Expense ratio | 0.16% |
| Benchmark | ₹1000 |
| Min SIP Amount | ₹1000 |
| 1 Y return (%) | 7.39% |
| 3 Y return (%) | 7.10% |
| 5 Y return (%) | 7.60% |
SBI Magnum Ultra Short Duration Fund
Launch Date: May 21, 1999
Riskometer: Low
To allow investors to create regular income with a high degree of liquidity by investments in a portfolio containing predominantly of debt and money market instruments. An open ended ultra-short duration debt scheme spending in tools like the Macaulay duration of Portfolio is for 3 months and 6 months.
The scheme will invest its corpus in the whole range of debt and money market securities in line with the investment goal to give engaging risk-adjusted returns to its investors by active management of credit risk and interest rate risk in its portfolio.
| NAV | ₹4277.61 |
| Fund Size / AUM | ₹8447 Cr |
| Expense ratio | 0.5% |
| Benchmark | CRISIL 10 Year Gilt Index |
| Min SIP Amount | – |
| 1 Y return (%) | 8.51% |
| 3 Y return (%) | 7.49% |
| 5 Y return (%) | 7.82% |
Franklin India Short Term Income Plan
Launch Date: January 31, 2002
Riskometer: Moderate
To give steady returns by investing in shorter maturity fixed-income securities – Franklin India Short Term Income Plan is the best plan to go for. It invests principally in short term corporate bonds with a centre on more eminent interest income.
Long term capital gains tax @20% plus overcharge, if appropriate and cess with indexation if units operated for more than 36 months. Short term capital gains tax at the income tax slab rate if units are kept for less than 36 months. Around 10% of the Units can be redeemed without any exit load in 1 year from the date of allotment. The ideal investment horizon recommended is for “1 year or more in this fund.
| NAV | ₹4063.86 |
| Fund Size / AUM | ₹13274 Cr |
| Expense ratio | 1.48% |
| Benchmark | CRISIL 10 Year Gilt Index |
| Min SIP Amount | ₹500 |
| 1 Y return (%) | 7.92% |
| 3 Y return (%) | 8.37% |
| 5 Y return (%) | 8.74% |
Aditya Birla Sun Life Savings Fund
Launch Date: November 27, 2001
Riskometer: Moderately Low
The main purpose of the schemes is to create regular income through investments in debt and money market instruments. Income may be created by the release of coupon payments or the purchase and sale of securities in the underlying portfolio. The schemes will under regular market conditions, invest its net assets in fixed income securities, money market instruments, cash and cash equivalents.
The scheme aims to give the benefit of a savings account with the chance to earn higher post-tax returns by spending in debt and money market instruments. Reasonable returns with the help of liquidity over the short term. Investing in debt and money market instruments.
| NAV | ₹ 381.88 |
| Fund Size / AUM | ₹ 15236.58 Cr |
| Expense ratio | 0.35% |
| Benchmark | CRISIL 10 Year Gilt Index |
| Min SIP Amount | ₹1000 |
| 1 Y return (%) | 8.93% |
| 3 Y return (%) | 7.87% |
| 5 Y return (%) | 8.44% |
UTI Money Market Fund Direct-Growth
Launch Date: 10 July 2009
Riskometer:
This fund aims to provide simple and high liquidity in short periods. Well, diversified portfolio of money market instruments trying to give steady returns with low volatility over the short term. Possibility of capital depletion is low and Interest rate risk is sought to be reduced by keeping a low duration. Investors viewing for the other source to place their surplus funds lying idle in savings/ current accounts can invest in this fund. Regular returns and liquidity over the near to short term for investors looking for the best investment option. Investors who are viewing for an STP to equity-oriented schemes Investment horizon it is perfect for the source of placing money over a short period ( up to 1 month).
Consistent income with a great level of liquidity beyond the short-term. Investors should discuss their mutual fund distributor if in doubt about whether the fund is proper for them.
| NAV | ₹2168.65 |
| Fund Size / AUM | ₹6472 Cr |
| Expense ratio | 0.26% |
| Benchmark | CRISIL 10 Year Gilt Index |
| Min SIP Amount | ₹2500 |
| 1 Y return (%) | 8.63% |
| 3 Y return (%) | 7.52% |
| 5 Y return (%) | 7.85% |
All of the above data is updated on 20th August 2019 i.e. the 1-year return, 3-year return and 5-year return, NAV, Expense ratio etc. The data provided will help you to choose the best low-risk investments option for investing in mutual funds.
Conclusion
If you are new to mutual funds and do not know much regarding investing in mutual funds, you should ask a mutual fund agent before moving furthers. It is better, to begin with, expert help.
After the active end to 2019 mutual fund market, some careful investors have been seeking security in 2020. Even for dynamic stock market addicts, an investment portfolio that’s changed with less-risky assets is important to secure your earnings see an increase over time. It’s better to low risk investment for new mutual fund investors.
If you want to invest in mutual funds for any service visit our website WealthBucket. You can look over multiple mutual fund services choices. Like short term mutual funds, liquid mutual funds, debt mutual funds, equity mutual funds, and income funds and many more. Why wait and think? Just log into the website.
One can call us at +91 9999379929 or email us at contact@wealthbucket.in
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