In investing, the time horizon plays a crucial role in deciding where to put your money based on your financial goal. For example, for a long-term goal like retirement, investments should be more focused on growth. In the meantime, a 3-year goal, “is short term and urgent, therefore the first thing to consider is capital protection,” says Arijit Sen, registered investment advisor at Sebi, co-founder of merrymind.com
“The interest rate is an important element, but the first condition is that the capital remains intact,” he adds.
“For such goals, one must opt for debt funds, if he wants to invest in mutual funds. The main reason for this is the volatility of the market. ”
Here are the funds you invest in for a 3-year objective:
Bond Funds and Dynamic Bond Funds: For such investments, investors can actually opt for funds with a higher maturity, it can be a bond fund, it can be a dynamic bond fund.
Credit calls should always be avoided in these cases, Sens warned, reiterating the Franklin Templeton fiasco. “In the event of default, due to a separate portfolio, the investor will not be able to withdraw this money.”
These funds provided returns of between 6% and 8%.
Funds to invest in:
- In the category of low duration funds, you can stick to the Kotak low duration fund.
- Under ultra short term you can go with ultra short term HDFC
- “And for people who are willing to take a little risk when it comes to the concept of risk return. Then he can switch to ICICI all-season bond funds, ”he suggested.
Arbitration funds: The investor can also turn to arbitration funds. Although it is 65% in equity, the mechanism is very different from hybrid funds. They buy in one market to sell in another. There is a gap between these two prices, which is basically a payoff.
Approximately, the investor will earn around 5-6% in an arbitrage
Funds to invest in:
- Kotak Arbitration Fund
- IDFC Arbitration Fund
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