Best Reliance Mutual Funds to Invest In For 8-10 Years
by Mashum Mollah Investing 12 December 2018
Investing is the new saving! Most of us keep piling up money to achieve our goals, however, with the current inflation rates, we need our money to multiply and work for itself. Choosing the right investments helps us do that! Mutual Funds are gaining popularity as one of the best investments of the modern times. The Reliance Mutual Fund group offers various options for you to choose from.
If you have already defined the duration of our investment as 8-10 years, then there are some specific options for you to choose from. However, the investment period shouldn’t be the key decisive factor in choosing the right scheme. The most important factor should be your risk appetite. Mutual funds don’t just come with promising returns, but also with probable risks. Since your investment span is desirably 8-10 years, it is safe to say that you are in this investment to achieve a long-term financial goal.
Depending on your risk appetite, you could be a conservative, moderate, or an aggressive investor. Conservative investors are those investors who have a low appetite for risk, they should allocate their portfolio in such a way that it is majorly invested in debt, with lesser investments in equity schemes. For a conservative investor, the ideal ratios would 75% in Fixed Income (debt) while 15% in equity and a standard allocation of 10% in gold.
One of the highly recommended mutual funds for conservative investors is the Reliance Dynamic Bond. This is an open-ended dynamic debt scheme that effectively minimizes your risk of losses, while it may also generate low to moderate gains for you. The 1-year CAGR (Compound Annual growth rate) is -0.25%, the 3-year CAGR is 5.79%, and the 5-year CAGR% is a decent gain of 8 %, as per the current scenario.
For moderate investors like you, a balanced asset allocation into equity and debt, with 10% in gold is recommended. If the capital gains are a bigger priority than countering the risk, then they should choose schemes that invest more in equities. From the Reliance Mutual funds, Reliance Smallcap Fund is an excellent choice and comes with a SIP option. The fund aims at generating long-term capital gains by majorly investing in equities. The 1-year CAGR is -8.96%, the 3-year CAGR is 13.51%, and the 5-year CAGR% is a smashing 30.54 %, as per the current scenario.
Those who are looking at a lump sum option; they should invest in Reliance Large Cap funds. The 1-year CAGR is 0.49%, the 3-year CAGR is 10.88%, and the 5-year CAGR% is 17.57 %, as per the current scenario. Both the above-mentioned funds can be fruitful over a long-term investment continuation; however, if a withdrawal is made within the first year, the exit load for both the funds is at 1%.
For an aggressive investor allocating the investment towards equity is preferred. It is recommended that the investor chooses to put majority, say 75% is in Equity, while 15% in Fixed Income (Debt) with the standard allocation of 10% in gold. If you pertain to this category, Reliance Value Fund is a good pick. The fund aims at generating high returns, and needless to say, this comes with high risks. The 1-year CAGR is 0.49%, the 3-year CAGR is 10.88%, and the 5-year CAGR% is 17.57 %, as per the current scenario.
Another good option for low-risk appetite will be Reliance Credit Risk Fund since it is a debt fund and aims to generate optimum returns. The 1-year CAGR is4.81%, the 3-year CAGR is 7.57%, and the 5-year CAGR% is 8.57 %, as per the current scenario.
A 10% allocation into gold savings fund is recommended, irrespective of the risk appetite of investors. The Reliance Gold Savings Fund is a versatile and dynamic fund that minimizes your risks while aspires to give you consistent returns over a long-term investment period. This fund requires a minimum investment of Rs.100 and in multiples of 1 rupee proceeding further with this. There is an exit load applicable here too, of 2% though, if a transaction is made within or before the first investment year. Currently, the 1-year CAGR is 0.75%, the 3-year CAGR is 3.57%, and the 5-year CAGR% is 1.9%.
These are some of the best funds to look at for those investors who are keen on investing for a time span of 8-10 years. However, do consider the risk appetite before choosing an investment scheme. You should also consult an experienced financial advisor to take you through your portfolio wisely.