If you’re conservative about investment but still want to grow your wealth while you sleep, it’s time you explored low-risk mutual funds. These funds help you preserve your capital while offering steady returns. You may be just starting your investment journey, or trying to stabilize your portfolio with predictable returns. These low-risk funds that primarily invest in debt instruments can help you balance the equity exposure.
In this blog, we have curated five funds that have delivered stable returns over the last five years, minimizing money market risks.
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5 Low-Risk Mutual Funds for Steady Capital Growth
These low risk mutual funds primarily invest in high-quality debt instruments, balancing steady returns with predictability.
1. Nippon India Nivesh Lakshya Long Duration Fund
The Nippon India Nivesh Lakshya Long Duration Fund is suitable for conservative investors with long-term investment goals. You can create an SIP in this fund with just INR 100, or invest a lumpsum amount of INR 5,000. The fund allocates its assets to low-risk instruments that generate stable income over time.
- AUM: INR9,609.25 crore
- NAV: INR18.0170
- Expense ratio: 0.33%
- 1-Year return: 4.56%
- 3-Year return: 8.02%
- 5-Year return: 5.95%
2. LIC MF Medium to Long Duration Fund
If you’re cautious while choosing your money market funds and expect predictable returns, the LIC MF Medium to Long Duration Fund can be a pick. It primarily invests in medium- to long-term debt instruments, balancing safety with steady returns. This fund is ideal for risk-averse individuals looking to grow capital over time without experiencing the stress of market swings.
- AUM: INR203.91 crore
- NAV: INR77.8517
- Expense ratio: 0.21%
- 1-Year return: 7.81%
- 3-Year return: 8.00%
- 5-Year return: 5.96%
3. Kotak Debt Hybrid Fund
The Kotak Debt Hybrid Fund offers a mix of safety and moderate growth to conservative investors. It has a 72.79% debt exposure, while the fund invests 21.79% in equities. Thus, investors experience stable returns while the equity exposure makes it slightly more aggressive compared to the other funds on this list.
- AUM: INR3,110.81 crore
- NAV: INR66.7518
- Expense ratio: 0.48%
- 1-Year return: 3.59%
- 3-Year return: 11.14%
- 5-Year return: 12.12%
4. Bank of India Short Term Income Fund
The Bank of India Short Term Income Fund invests in government and corporate bonds, prioritizing capital preservation and consistent income. It’s ideal for investors who want safety along with liquidity, while expecting returns higher than a typical savings account. It has given a stable return of over 10% in the last 5 years.
- AUM: INR242.86 crore
- NAV: INR29.3921
- Expense ratio: 0.45%
- 1-Year return: 9.94%
- 3-Year return: 10.21%
- 5-Year return: 10.71%
5. Aditya Birla Sun Life Medium Term Plan
The Aditya Birla Sun Life Medium Term Plan strategically divides its assets between the debt and cash segments. This fund invests in medium-term bonds and select debt instruments to minimize risk and deliver stable return. You can create an SIP in this fund starting from INR 1,000, while the minimum lump sum investment is INR 5,000.
- AUM: INR2,847.79 crore
- NAV: INR43.8221
- Expense ratio: 0.83%
- 1-Year return: 13.53%
- 3-Year return: 10.00%
- 5-Year return: 13.07%
Conclusion
In this blog, we have comprehensively covered low-risk funds that are ideal for investors with different investment horizons. These funds invest in debt securities and offer consistent and stable returns over the long run.
However, always prioritize your risk tolerance and investment horizon when you create an SIP or invest a lumpsum amount in these low-risk funds.