A InfoBlog

Mutual Funds and the types of investment Options

The types of investment Options: Unless you have the right technical knowledge or decision making skills, each one of us know that investing in mutual funds could be risky. However,if rightly done, these are currently the best option through which you can earn the maximum free money. Mutual funds are investment options in the form of equities or fixed income which are managed by professional money managers.

Even a short term global event, like the collapse of the Yuan or Brazilian currency or the increase in US interest rates, can swipe away your bought stocks, unless you have a great investment IQ. Hence, mutual funds are better options than individual stock marketing, as they are handled by those professionals who can usually foresee the upcoming complexities through constant market research and experience.

Investing in mutual funds is need based and depends upon how much money you can actually afford to invest. However, if you want to be on the safe side, it’s always better to invest in ‘Balanced Mutual Funds’. These balanced mutual funds are likely to achieve their targets as they can hold the actual bond value, even if the stock falls. However, when the stocks rise again, the bonds may yield a lower value. These balance funds generally consist of 75% of stocks and the remaining as bonds. Since, the system is structurally a diversified fund; it offers greater flexibility and isa low risk investmentoption that gives predominantly quite high returns. Thus, in one line, Balanced Mutual Funds can be summarised as ‘Mutual Funds with High yielding profits and reduced risk’. However, looking at the cons, these types of bonds typically provide lesser yields than the market level profits as the profit through the bonds is comparatively lower. Other than this, quite undoubtedly this is a good long term investment mutual fund scheme.

Here are the types of investment Options that you can quite trustfully invest in and which have been showing consistent performance over several years:

  1. HDFC Balanced Fund

This one is the investor’s favourite as it has been maintaining an AUM of Rs. 1, 920 crores for the last 5 years with a 19% CAGR and consistent track record.

  1. ICICI Prudential Balanced Fund

Coming from a trusted brand image, the ICICI Prudential can give returns as high as 18% CAGR and has been constantly giving the same figure for the past 5 years.

  1. TATA Balance Fund

This one gives an average of 16% CAGR and has a very good potential with the decent stock portfolio. Moreover, during the past three years, the CAGR levels are going as far as 23.5%

  1. HDFC Prudence Fund

If you possess high assets, then this must be suitable for you. It has been giving minimum returns of 17% for the past 5 years.

Whatsoever amount of fund you want to invest with, make sure that you preferably diversify them according to the estimated profits over a period of time. These estimations of profits, though may constantly change from time to time, can be evaluated by assessing past performance over different periods. Diversification will not only protect at least some portion of your total funds, but will also help you in achieving your investment objective peacefully.