Which mutual fund is best suited to today’s markets for short-term investors

Investing in mutual funds: Amid hawkish central banks over rising interest rates, rising inflation and fears of a downturn, mutual fund investors need some adjustments in their portfolios. According to investment experts, short-term debt funds (no more than 2 years) are better suited than equity mutual funds.

Mutual fund experts said equity markets are likely to remain under pressure in the near term as the RBI and other central banks are expected to raise interest rates further to tame inflation. They advised investors to look to debt mutual funds as they can outperform equity funds by around 0.50% to 1% in the short term. However, they maintained that the tweak is only applicable to investors who have up to two years of vision.

Unveiling the short-term mutual fund investment strategy, Dhirendra Kumar, CEO of Value Research, said, “For any non-tradable goal within 2 years, always consider a short-term or ultra-short fund. term”.

Echoing Dhirendra Kumar’s view, Pankaj Mathpal, CEO and Managing Director of Optima Money Managers, said, “Debt funds or short and very short-term liquid funds are better suited to today’s stock market, as these options are expected to outperform equity funds by approximately 0.5 percent to 1 percent in the short term.”

On the returns a short-term mutual fund investor can expect from debt funds, Sandeep Bagla, CEO of Trust Mutual Fund, said: “Liquid funds are likely to generate returns of 4.75% to 5% with low volatility”.

On how to turn the current market challenge into an opportunity, Vinit Khandare, CEO and Founder of MyFundBazaar, said, “For an investment of a month or less, opt for a very short-term bond fund. For a one-month to one-quarter investment, go for cash The bond market is pricing in a 200 basis point rise in the repo rate over the next two years, with terminal repo rates at 6%. One-year bond yields are trading between 5.10% and 5.20%.

When asked about debt funds a new investor can consider when investing in the short term, Pankaj Mathpal of Optima Money Managers listed the following debt funds:

1]Fund fund manager Aditya Birla Sun Life;

2]ICICI Short Term Prudential Fund;

3]Nippon India Short Term Fund; and

4]SBI Savings Fund.

Disclaimer: The opinions and recommendations made above are those of individual analysts or personal finance companies, and not of Mint.

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Dolores W. Simon