Mutual funds are a dynamic investment product that has options to cater for every class of investors. Mutual funds have the potential to offer great returns when the investors are invested in the fund for a longer period of time. However, mutual funds also provide a great opportunity to earn better returns than FDs in the short term too.
Given below are some top funds in different categories that can be a good investment option for the short term like 3 to 4 years and a few details about short term funds.
Top funds for short term duration of 3-4 years
Mutual funds have the advantage of entering and exiting the fund at any point in time. The duration of staying invested in any fund depends on many factors like risk assessment, returns expectations, meeting short-term financial goals, etc. Funds to be invested for the short term can belong to many categories depending on their risk-return parameters. Some of the top categories of funds suited for short-term investment of 3-4 years are mentioned hereunder.
Aggressive hybrid funds
Aggressive hybrid funds are funds that invest between 65% to 80% in equity and equity instruments and balance 20% to 35% in debt and debt instruments. Aggressive hybrid funds allow the fund managers to be more aggressive with their underlying assets. It allows them to take advantage of arbitrage opportunities. Some of the top funds in this category are,
Canara Robeco Equity Hybrid Fund
This fund was launched in the year 1993 and has been providing returns of 12.78% to investors since its launch. Some of the details of this fund are mentioned below.
Particulars | Details |
Fund manager | Mr. Shridatta Bhandwaldar |
Launch date | 1st February 1993 |
Minimum investment | Rs. 5,000 |
Expense ratio | 1.95% |
Risk | Moderately high |
The returns provided by the fund as of 24th July 2021 are tabled below
Period | 6 months | 1 yr | 3 yrs | 5 yrs | Since launch |
Returns | 12.68% | 36.15% | 15.05% | 14.21% | 12.78% |
SBI Equity Hybrid Fund
This fund was launched by SBI Mutual fund in the year 1995 and follows CRISIL Hybrid 35+65 Aggressive TRI. Some details of the fund are,
Particulars | Details |
Fund manager | Mr. R. Srinivasan |
Launch date | 31st December 1995 |
Minimum investment | Rs. 1,000 |
Expense ratio | 1.63% |
Risk | Moderately High |
The returns provided by the fund as of 24th July 2021 are tabled below
Period | 6 months | 1 yr | 3 yrs | 5 yrs | Since launch |
Returns | 12.45% | 34.95% | 14.08% | 12.94% | 16.02% |
ICICI Prudential Equity & Debt Fund
This fund is launched by SBI Mutual fund in the year 1995 and follows CRISIL Hybrid 35+65 Aggressive TRI. Some details of the fund are,
Particulars | Details |
Fund manager | Mr. Mittul Kalawadia |
Launch date | 3rd November 1999 |
Minimum investment | Rs. 5,000 |
Expense ratio | 1.81% |
Risk | Moderately High |
The returns provided by the fund as of 24th July 2021 are tabled below
Period | 6 months | 1 yr | 3 yrs | 5 yrs | Since launch |
Returns | 21.27% | 48.34% | 15.22% | 13.69% | 14.52% |
Balanced funds
Balanced funds are mutual funds that invest in equity and debt instruments in a fixed proportion. Investment in these funds allows the investors to spread their risk and also get the advantage of higher returns along the way. The top fund under this category and their details are given below.
Edelweiss Balanced Advantage Fund
This fund was launched in the year 2009 and follows CRISIL Hybrid 50+50 Moderate TRI as its benchmark. The details of this fund are given below.
Particulars | Details |
Fund manager | Mr. Bharat Lahoti |
Launch date | 20th August 2009 |
Minimum investment | Rs. 5,000 |
Expense ratio | 1.90% |
Risk | Moderately High |
The returns provided by the fund as of 24th July 2021 are tabled below
Period | 6 months | 1 yr | 3 yrs | 5 yrs | Since launch |
Returns | 10.33% | 30.21% | 13.46% | 12.52% | 10.79% |
Large cap funds
Large-cap funds are equity mutual funds that invest in companies with the highest market capitalization. Such companies are ranked among the top 250 companies in terms of market capitalization. These funds are relatively less risky and can provide stable and sustainable returns to investors over a long period of time.
This fund was launched in the year 2010 and is from the fund house of Axis Mutual Fund. This fund follows NIFTY 50 TRI as its benchmark. Given below are a few details of the fund
Particulars | Details |
Fund manager | Mr. Shreyash Devalkar |
Launch date | 5th January 2010 |
Minimum investment | Rs. 5,000 |
Expense ratio | 1.76% |
Risk | Very High |
The returns provided by the fund as of 24th July 2021 are tabled below
Period | 6 months | 1 yr | 3 yrs | 5 yrs | Since launch |
Returns | 10.02% | 39.80% | 14.37% | 16.29% | 13.34% |
Target investors
Investors having a shorter investment horizon should target funds like those mentioned above for about 3 to 4 years. Such short-term investments provide better investment opportunities than banks or other short-term investment options like bank FDs, corporate FDs, Post Office Time Deposits, Recurring Deposits, etc. These funds are usually preferred by risk-averse investors as the risk parameters for the short term are relatively low and the returns generated are comparatively higher.
Conclusion
Mutual funds have the advantage of providing decent returns to the investors in the short term and long term provided the selection of funds is done on a prudent basis. The underlying factors for the selection of funds have to be carefully evaluated while selecting funds for a short duration. The factors in such cases can be the financial needs to meet short-term goals, surplus budget for a limited time, the risk factor of the investments, returns potential, etc.
FAQs
1. How are balanced funds taxed?
A. The taxation of balanced funds depends on the asset configuration of the fund. An equity-oriented balanced fund will be taxed in the lines of equity mutual funds and a debt-oriented balanced fund will be taxed like a debt mutual fund.
2. What are short-term funds?
A. Short-term mutual funds are funds with a short maturity period which is usually between 1 year to 3 years. These funds are in the nature of debt mutual funds and are taxed in a similar fashion. The risk of such funds is relatively low and the returns potential relatively higher than traditional short-term investment options like Bank FDs, corporate FDs, etc.
3. Can a person invest in multiple funds of different investment horizons?
A. Yes. mutual funds offer the diversity to invest in funds for short duration or for long durations. There is no fixed timeline for minimum or maximum investment duration in mutual funds (except ELSS funds with a lock-in period of 3 years).
4. How can a person invest in mutual funds?
A. A person can invest in mutual funds through SIP or lump sum investment mode.
5. How can a person invest in mutual funds through Fisdom App?
A. Investment in mutual funds through Fisdom can be done in the following easy steps.
- Download the app from Google Playstore and Apple Store
- Login to the app by entering the valid username and password
- Select the fund to invest from various categories
- Select mode of investment (SIP/ Lump sum)
- Select the date of deduction of SIP from bank account
- Link bank account and provide KYC details
- Make the payment of the amount to be invested through any of the available online payment modes.
- Get acknowledgment of the mutual fund investment in the app.