If you are someone who is not happy with your current investments and the way they are performing and looking for an alternative investment vehicle, then you can consider diversifying your investment portfolio with short term schemes like debt mutual funds. can consider.
Short-Term Fund is an open ended debt fund scheme that invests in debt and money market instruments. As per SEBI guidelines, a short term fund should invest in debt and money market instruments such that the Macaulay duration of the portfolio is between 1 year to 3 years. Short term funds are ideal for anyone who wants to earn good capital appreciation without exposing their finances to the volatile nature of the equity market.
Why should investors focus on short term schemes?
Short term schemes have the potential to offer decent capital growth. If you are planning to switch from traditional options to mutual funds as they are relatively less risky as compared to equity schemes, you can give yourself a head start by investing in short term schemes. Further, since there is no lock-in period in short term schemes, investors are free to withdraw or redeem their short term scheme units on any trading day. The amount is transferred to the linked savings account of the investor. You are free to liquidate the units as per your income needs, while the balance amount will continue to be invested. Short term plans offer liquidity and flexibility that are not available with the traditional route with less ease of investment and withdrawal options.
There is an option of short term schemes
sip
and lump sum investment. Systematic Investment Plan or SIP is an investment method where you can invest a small fixed amount at regular intervals. If you have spare money and are sitting ideally, you can invest it in a short term scheme by making a lumpsum investment. However, with SIP, one does not require huge investment amount to invest in short term schemes. Now you can invest a small fixed amount periodically through SIP and continue investing till your investment objective is achieved. Systematic Investment Plan is an easy and hassle-free way to invest in Mutual Funds. An investor has to complete all the formalities and KYC documents before investing. Investors can also use the SIP calculator, a free online tool, which helps them determine how much corpus their SIP investments can accumulate at the end of the investment journey.
who start a
sip Short term plans benefit from the power of compounding. In mutual funds, compounding refers to the interest that you earn on the interest earned from the initial investment amount. Investors who allow reinvestment benefit from compounding. It is ideal for anyone looking to build a decent corpus through systematic and long term investments.
If they want to take advantage of compounding, you can go for growth. This is because if you opt for the dividend plan, you will receive dividends, which means that your capital will not be reinvested. Hence, to benefit from compounding, make sure you opt for growth plans and not dividend plans while investing in short-term schemes.
“This is an investor education and awareness initiative by Axis Mutual Fund. Investors need to complete a one-time KYC process. For more details visit www.axismf.com or contact us at [email protected]. Investors should only Should deal with registered mutual funds, details of which are available at www.sebi.gov.in – INTERMEDIARIES/MARKET INFRASTRUCTURE INSTITUTIONS section. For any grievance redressal, investors may call us at 1800 221 322 or write to us at customerservice@ axismf.com or register a complaint on SEBI SCORE portal.
https://scores.gov.in
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Mutual Fund investments are subject to market risks, read all scheme documents carefully.