For short-term and long-term investment goals, we discussed mutual fund investment plans. Diversification, professional management, and low costs are among the benefits of mutual funds. Various types of mutual fund schemes and investment plans, including equity, debt, hybrid, and index funds, were also discussed, along with how they fit with different investment goals and risk appetites. Our final point was to describe how Bajaj Finserv Investment Solutions offers investors convenient and accessible ways to invest in mutual funds, with advantages such as ease of investing, diversified portfolios, an SIP return calculator, and expert advice.
Financial goals can be achieved by investing in mutual fund schemes. Professional fund managers manage a diverse portfolio of assets through mutual funds. It is nonetheless important to select the right mutual fund investment plan for your investment goals, as different plans are suitable for different kinds of investments. To reach financial goals, investors should choose the right mutual fund investment plan with the help of a SIP return calculator.
Short-Term Mutual Funds
Short-term mutual funds emerge as financial instruments meticulously crafted for investors wielding a relatively concise investment horizon, typically oscillating between a few fleeting days to a span of several years. These specialized funds unfold a strategic tapestry where liquidity and the preservation of capital reign supreme, all while endeavoring to orchestrate a delicate balance that yields modest returns. Within this realm, liquid funds command attention, standing out prominently for their remarkable liquidity and steadfast commitment to shielding capital, rendering them aptly suited for goals of an ultra-short duration, often confined within the confines of a mere few weeks.
Venturing further into the spectrum, ultra-short-term funds materialize as the maestros of equilibrium, navigating the fine line between returns and duration. Their investment canvas is adorned with short-term debt instruments, adorned with slightly extended maturities compared to their liquid counterparts, ensuring a nuanced dance in the pursuit of financial objectives.
As the temporal horizon extends, short-term debt funds gracefully step into the limelight, tailored for those with an investment vista spanning one to three years. This cohort proffers a moderate level of risk, accompanied by the allure of superior returns when juxtaposed against their liquid and ultra-short-term counterparts.
Fixed Maturity Plans (FMPs), adorned with the regality of a predetermined maturity date, unfurl as fitting choices for specific short-term goals, typically unfurling over a duration of one to three years. In this symphony of financial instruments, Treasury and Government Securities Funds compose a compelling melody, harmonizing with government securities to offer a melange of stability and moderate returns. Positioned as stalwart options, they beckon investors with short to medium-term investment aspirations.
Mutual fund investment plans for the short-term
Investors with a three-year time horizon may benefit from a short-term mutual fund investment plan. Capital appreciation is invested in a shorter amount of time when compared with long-term investments. Mutual funds are invested in equity and debt securities to give investors stable returns. With such investments, you have lower risks and higher returns.
What’s in a debt fund?
Fixed-income securities are debt funds, including money market instruments, government securities, and bonds. They provide stable returns and aren’t as risky. Investors who are risk-averse can benefit from debt funds as they offer much higher returns than traditional fixed-income investments.
Liquid funds
When you invest in a cash-conserving fund, your cash goes into treasury bills, deposit certificates, and commercial papers. Such funds are known to generate higher returns and have easier liquidity than most fixed deposits or savings accounts. Unlike savings accounts, liquid funds are an excellent choice for investors who want a short-term investment with a high return.
Funds with ultra-short maturities:
Investments in ultra-short-term debt securities have a maturity of up to six months and are a type of debt mutual fund scheme. For investors seeking higher returns than savings accounts or fixed deposits while avoiding high volatility, these funds offer higher returns than liquid funds.
Long-Term Mutual Funds
Long-term mutual funds unfurl as purposeful vessels navigating the seas of investment, meticulously crafted to chart a course toward sustained growth and the accumulation of wealth. This voyage, characterized by its endurance, typically spans a robust five years or more, showcasing a commitment to enduring financial prosperity.
At the forefront of this financial odyssey stand equity funds, luminary figures among their long-term counterparts. With a gaze fixed on stocks, these funds embark on a quest for capital appreciation that resonates across the expansive horizon of the long haul. However, the path they tread is not devoid of challenges; the inherent market volatility bestows upon them a mantle of higher risk. Yet, the annals of history attest to their ability to weave narratives of superior long-term returns, making them stalwart companions in the journey toward financial growth.
Plans for long-term mutual fund investments
Investors with a time horizon greater than five years should consider long-term mutual fund investment plans. A long-term investment plan is relatively riskier than a short-term plan since this plan is aimed at generating wealth over time. Long-term mutual funds aim to provide investors with higher returns by investing in equity and debt securities. Retirement planning, wealth creation, and children’s education are among the long-term investment goals that can be achieved through these plans.
Investing in equity funds:
Stock funds invest primarily in companies’ stocks across various sectors and market capitalizations. Higher risks are taken in these funds to generate high returns. An equity fund is a good investment if the investor wants to achieve long-term financial goals and is willing to take on higher risks.
Funds that are hybrid:
This investment plan merges the debt and equity securities, providing a balanced risk portfolio. Hybrid funds are better for anyone seeking long-term goals and who wants a balanced portfolio.
Index fund investing:
Index funds are those that are tracked by an index like the Sensex of NIFTY. The funds mimic the returns you get on an index so that investors can invest in the stock market with fewer risks and professional fund management.
Choosing good mutual funds for yourself:
Investing in the right mutual fund requires a little thought: time horizon, risk appetite, and investment goals. Before you begin investing, assess the track records of the fund managers, expense ratio, and portfolio diversification.
Investors of varying goals and risk quotients can consider solutions from Bajaj Finserv. Bajaj Finserv Investment Solutions offers the following benefits:
Investing is easy:
With Bajaj Finserv Investment Solutions, you can invest in mutual funds hassle-free, paperless, and with a range of investment options at your fingertips. The platform makes online investing in mutual funds possible, allowing investors to track their investments from anywhere and at any time.
Diversification of portfolios:
Diverse portfolios give you access to several mutual funds like debt, equity, hybrid, and index funds.
Advice from the experts
Bajaj Finserv offers custom investment plans, and investors can make use of self-help tools like the portfolio analysis tool to examine their portfolios.
Cost-effective:
Solutions available are affordable and have low expense ratios, performance updates, and help with investment strategies.
Mutual fund schemes fit both short-term and long-term goals. The best funds are for the short term as they can have a three-year or less time frame. There are long-term funds that range from five or more years.
