It is advisable to invest in mutual funds for a long time so that you can get a good fund. If you are also planning to invest and want to make good money from Mutual Funds then this news can help you. Let’s know from experts how to do investment planning and how you can get higher returns?
Which type of fund has higher returns
According to tax and investment experts, the rate hike could have an impact on the returns of equity mutual funds in the short term i.e. 6 months to two years. A Mint report quoted experts as saying that short-term investors, who have a time horizon of 6 months to two years, should invest in debt mutual funds – liquid, money market and bond funds. Such funds can earn an interest rate of 0.50-1 per cent higher than their current annual average return.
You can invest in these funds for one to three months
Vineet Khandare, CEO and Founder, MyFundBazaar, told Mint that every investor can invest the portfolio in funds that have rising interest rates. However, it should be invested for less than 2%. On the other hand, if you want to invest for a month or less, then you can go for ultra-short term bond funds, while for quarterly investments you can buy money market funds.
You can choose the target fund to be invested for a long time
Apart from this, if you are planning to invest for one year, then investors should look at the high returns and its position in the market. Investors with long-term investments can invest in Target Maturity Funds along with term investments.
Mutual funds can change
On changes in mutual fund investments on hike in RBI interest rates, Palka Arora Chopra, Senior Vice President, MasterTrust, said that with the rise in interest rates due to rising inflation, investors will have to change their existing debt fund portfolio. Along with this, a new investment plan should also be made. One must invest in liquid and money market funds to benefit from rising interest rates. Investors can look at dynamic bond funds for a long time.
Which fund has higher interest for short term
On the expected returns from debt funds in the short term, Sandeep Bagla, CEO, Trust Mutual Fund, said that any debt mutual fund with a maturity of up to two years can offer significantly higher interest rates than liquid or overnight funds. Liquid funds are likely to offer interest income of around 4.75 per cent to 5 per cent with low volatility. A banking and PSU debt fund with 6.80 per cent to 7 per cent can be balance funds for two years. These funds are expected to do very well in 3-6 months.
According to Pankaj Mathpal of Optima Money Managers, one can invest in some of the below mentioned funds for debt mutual funds, wherein investors can get 0.50 per cent to 1.0 per cent higher interest rate than the annualized return.
- Aditya Birla Sun Life Money Manager Fund
- ICICI Prudential Short Term Fund
- Nippon India Short Term Fund
- SBI Savings Fund