Widen Your Investment Universe While Investing In MFs

It is heartening to see an ever increasing number of investors adopting a disciplined investment approach through SIP for investing in mutual funds. However, while equity and equity-oriented balanced funds have caught the fancy of investors, many other categories of funds that have the potential to help them achieve a number of short and medium term goals as well as keep their asset allocation within their comfort zone have not got their due.

- Hemant Rustagi

Investors can benefit tremendously by including them in their portfolio. Here are some of these categories of funds and how they can benefit investors:

Liquid Funds: Liquid funds invest in securities with a residual maturity of not more than 91 days. Investments are mostly made in money market instruments. These funds are suitable for investors who intend to park money for a short period, i.e. from a few days to a few months, and hope to earn returns better than those from savings bank accounts.

Ultra Short-Term Income Funds : Ultra short-term income funds are positioned between a liquid fund and a short-term income fund. These funds seek to provide a high degree of liquidity along with generation of reasonable returns by investing in a portfolio consisting of short-term debt and money market instruments. These funds are suitable for investors who wish to invest for a period of around 3 to 12 months and seek to earn higher returns than liquid funds without compromising on a higher level of liquidity.