1. 10 best mutual fund categories where women can invest their money

10 best mutual fund categories where women can invest their money

One of the best ways to achieve one's financial goals is to invest in mutual funds wisely over a longer period of time. This will not only help you develop a habit of dedicated savings, but it will also help in generating higher returns on the amount thus saved.

By: | Published: March 8, 2017 3:11 PM
These funds are the mix of three asset classes – equity, debt and cash equivalents – dealing in a wide variety of securities.

Modern-day women are not only strong and smart but financially independent also, who can cater to their needs all by themselves. However, they also need to plan for their future financial goals.

One of the best ways to achieve one’s financial goals is to invest in mutual funds wisely over a longer period of time. This will not only help you develop a habit of dedicated savings, but it will also help in generating higher returns on the amount thus saved.

Here are ten different schemes where women can invest their money:

Asset Allocation Funds
These funds are the mix of three asset classes – equity, debt and cash equivalents – dealing in a wide variety of securities. These are formed having a certain mix of asset classes unlike balanced funds where the ratio is defined approximately in the 60:40 ratio of equity and debt class, respectively. This fund in itself gives a diversification to your invested amount.

Debt Funds
These funds invest in pure debt instruments and money market instruments, and generally provide a return of 7% to 9%, depending on the asset mix. The investment options available under such funds are MIP’s, FMP’s, liquid funds, etc. People who generally do not want to take risk of the high market volatility can invest in such funds. However, the volatility factor cannot be neglected completely.

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Sectoral Funds
If you want to invest your money in certain sectors, you can choose such kind of funds. These funds are designed by inculcating different sectors which are closely related to each other. For example, IT and telecom sector, banking sector and so on. Sometimes, certain sectors grow immensely. Therefore, taking the advantage of the same one should invest in such funds.

Thematic Funds

Unlike sector funds, these funds provide a wider scope of diversification in making investments. Here the selection of companies from different sectors is done on the basis of a common theme. For example, infra funds where sectors can be like various oil corporations, GAIL, LNG, gas, steel, etc.

Flexi-cap Funds
This kind of fund is not dependent upon the market capitalization of a company which makes the fund manager make the best use of opportunities which they are getting from the market volatility. The scope of diversifying the investment widens when investing in flexi cap funds.

Liquid Funds
Liquid funds are a type of mutual funds that invest in securities which have a maturity of up to 91 days. Assets invested are not held for a long time as liquid funds do not have a lock-in period. They can be easily redeemed any time. You can generate approximately 7% to 9% of return annually or even more as per market conditions. Returns are not guaranteed as the performance of the fund depends upon how the market performs.

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Diversified Funds
It is an investment fund that contains a wide variety of securities so as to reduce the amount of risk in the fund. This mainly spreads the risk into various sectors which help risk-averse investors to take exposure to a mutual fund. Actively maintaining diversification helps in preventing the events that affect one sector and reduces heavy losses if market conditions tend to go wrong. These are good funds to invest your money. They also provide better returns than liquid funds.

Balanced Funds
A balanced fund combines debt and equity stocks equally, which is generally a bond component or sometimes a money market component. These hybrid funds stick to a relatively fixed mix of stocks and bonds mainly in 50:50 ratio, which reflects either a moderate, aggressive, or conservative, or higher fixed-income, component orientation. These funds are beneficial for those who are always unsure about making an investment either in risky funds or less-risky funds. They also offer good returns compared to other liquid funds.

Large Cap Funds
Lap cap funds are the funds which comprise of blue-chips companies with large market capitalization. However, the criteria of being a large cap varies from company to company considering their huge market capitalization.

There are a variety of mutual funds available in the market which can be bought from financial services companies. These funds offer stability and sustainability with slightly fewer returns as compared to diversified funds and small /mid cap funds under normal conditions. These funds also help in generating a good corpus for you in the long term.

Mid/Small Cap Funds
These funds are very risky in nature, but provide exceptionally high returns because these funds comprise of small and emerging companies’ funds which provide very good returns. Generally, these companies have low market capitalization. Someone who is very aggressive in taking risks can invest in such funds. These funds offer the highest returns under normal conditions as compared to other categories of funds.

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Conclusion
Investing in mutual funds is subject to market risk. Therefore, before making any investment, consult your financial adviser. The more the number of years you are invested in, the more corpus you can create due to the compounding effect. Hence, it is suggested to start your investments as early as possible.

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