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Time of India
11 hours ago
- Business
- Time of India
1 in 2 mutual funds lost money in the last year. Is yours on the list?
Live Events Positive performers Methodology: Disclaimer: Mutual fund investors have lost money in every second mutual fund over the last year, an analysis by ETMutualFunds shows. Nearly 61% of equity mutual funds delivered negative returns on lump sum investments during this total, there were around 272 funds in the said period, of which 167 posted negative returns, 104 gave positive returns, and one failed to generate any return. Further analysis showed that around 17 funds have lost over 10% on lump sum investments in the past Flexi Cap Fund recorded the steepest loss on lump sum investments, delivering a negative return of 17.48% over the same period. A lump sum investment made a year ago would now be worth just Rs 82, Multi Cap Fund delivered a negative return of 15.31% over the same period. A lump sum investment made a year ago would now be worth Rs 84, Flexi Cap Fund and Quant Mid Cap Fund lost 14.24% and 14.07%, respectively, during the period, while Quant Large & Mid Cap Fund delivered a negative return of 13.07%.Three funds from Quant Mutual Fund — Quant Value Fund, Quant ELSS Tax Saver Fund, and Quant Flexi Cap Fund — lost 12.52%, 12.42%, and 12.38%, respectively, on lump sum investments in the last one focused funds, Quant Focused Fund and Motilal Oswal Focused Fund, also recorded double-digit losses, down 10.46% and 10.10%, respectively. JM Large Cap Fund declined 9.41% in the same period. Quant Small Cap Fund lost 7.91% over the year, while two small cap schemes — Mahindra Manulife Small Cap Fund and HSBC Small Cap Fund — gave negative returns of 6.35% and 6.32%, schemes from LIC Mutual Fund, LIC MF Small Cap Fund, LIC MF Value Fund, and LIC MF Flexi Cap Fund, were down 6.17%, 6.09%, and 6.03%, India Small Cap Fund, the largest small-cap fund by assets, delivered a negative return of 5.81%. Three others, JM Small Cap Fund, Kotak Small Cap Fund , and Aditya Birla SL Small Cap Fund, declined between 4.90% and 5.06%.UTI Focused Fund and Baroda BNP Paribas Mid Cap Fund lost 3.47% each, while SBI Contra Fund and SBI Flexicap Fund posted losses of 3.15% and 3.05%, respectively. Mahindra Manulife Large & Mid Cap Fund also declined by 3.05%.Mirae Asset Midcap Fund posted a relatively lower loss of 0.81% on lump sum investments made a year two focused funds, Nippon India Focused Fund and Aditya Birla SL Focused Fund, ended the list with marginal losses of 0.04% funds delivered double-digit returns on lump sum investments over the last one year. Motilal Oswal Multi Cap Fund led the pack with a 21.35% return, followed by Invesco India Midcap Fund and Motilal Oswal Large Cap Fund, which returned 12.15% and 11.58%, respectively. Invesco India Large & Mid Cap Fund delivered an 11.02% return on lump sum more schemes from Motilal Oswal Mutual Fund, Motilal Oswal Large & Midcap Fund and Motilal Oswal Small Cap Fund, delivered 8.96% and 8.61%, respectively, over the past Parikh Flexi Cap Fund, the largest active mutual fund and the largest in the flexi cap category by assets under management, delivered an 8% return on lump sum investments over the same Flexi Cap Fund posted a return of 4.06%, while HDFC Mid Cap Fund delivered 2.41%. Motilal Oswal Midcap Fund returned 1.67%, followed closely by Kotak Midcap Fund, which gave a return of 1.65%.ICICI Prudential Multicap Fund was the last fund to offer a positive return, at just 0.01% over the past year on lump sum Canara Robeco Mid Cap Fund delivered 0.00% return over the same time considered all equity mutual funds, excluding sectoral and thematic schemes, and included only regular plan, growth option funds. Returns were calculated based on lump sum investments made from July 29, 2024 to July 28, above is a data-based performance review, not a recommendation. It is not intended to guide investment or redemption decisions. Investors must always consider their risk appetite, investment goals, and time horizon before making any investment decision.
Economic Times
15 hours ago
- Business
- Economic Times
NPS equity funds see low single-digit returns in 1 year. Is it time to review your retirement strategy?
National Pension System equity funds show low returns this past year. Experts blame market conditions and NPS structure. NPS equity funds have delivered low single-digit returns over the past year and according to market experts, this underperformance can be attributed to the current neutral market phase impacted by geopolitical tensions, as well as the structural limitations of the NPS framework. 'The market right now is in a neutral phase, impacted by geopolitical crisis, US tariff expectations and weak earnings in key sectors such as IT and financials, both of which form a significant portion of NPS equity portfolios. Another thing to keep in mind is the structure of NPS itself,' Arjun Guha Thakurta, Executive Director at Anand Rathi Wealth Limited shared with ETMutualFunds. Also Read | Smallcap mutual funds dominate return charts in 5 & 10 years. What's driving the surge? According to the structure of NPS, about 20-25% of the portfolio is mandatorily in debt, which typically won't go beyond 7–8% returns therefore, the real growth engine is the 50-75% in equity, and that's been playing around market volatility lately. 'Also, since most NPS equity funds invest heavily in large caps, nearly 70% of the portfolio, they miss out on the higher growth potential that mid and small caps have delivered over time. Together, these factors have resulted in lower returns,' he added. Out of 10 NPS fund managers, nine have offered upto single-digit returns, one delivered negative return in the same period, according to data provided to ET by Value Research. DSP Pension Fund, relatively a new entrant, has offered the highest return of around 8.90% in the last one year. Kotak Pension Fund offered a return of 3.90% in the last one year period. Three fund managers - HDFC Pension Fund, ICICI Prudential Pension Fund, and UTI Pension Fund offered 2.52%, 2.22%, and 2.17% returns respectively in the said time period. LIC Pension Fund and ABSL Pension Scheme offered 1.88% and 1.39% returns respectively in the last one year. Axis Pension Fund and Tata Pension Management offered 0.93% and 0.83% returns respectively in the said period. And lastly, SBI Pension Fund offered a negative return of 1.15% in the said period. Post looking at the performance of NPS equity funds, should one consider rebalancing their asset allocation and what is the ideal time to hold onto equity investments in NPS to potentially see meaningful growth, Thakurta recommends that a better approach is to manage the overall allocation at a portfolio level as this allows an investor to align their equity and debt exposure with your goals, investment horizon and risk appetite more further adds that NPS can be compared to a hybrid fund with a lock in, where you don't have full control over asset allocation along with compromised liquidity. In NPS, the subscriber is required to decide investment choice whether active choice or auto choice. In active choice, a subscriber has the right to actively decide as to how the contribution is to be invested based on their personal preference. In this, subscribers can select multiple asset classes under a single pension fund manager. Upto 50 years of age, the maximum permitted equity investment is 75% of the total asset allocation. From 51 years and above, maximum permitted equity iInvestment differs. Percentage contribution value cannot exceed 5% for Alternative Investment Funds. The total allocation across equity and related instruments, corporate debt and related instruments, government bonds and related instruments and alternative investment funds including instruments like CMBS, MBS, REITS, AIFs, Invlts etc asset classes must be equal to 100%On the other hand, in auto choice, the investments will be made in a life-cycle fund and the proportion of funds invested across three asset classes will be determined by a pre-defined portfolio. Also Read | Consistent performers: Over 40 equity mutual funds offer over 15% CAGR in 3, 5, 7 and 10 year horizons NPS is focused on saving for retirement whereas mutual funds help investors to plan for different financial goals. The NPS scheme has a certain maturity period of 60 years and withdrawal restrictions. Mutual funds offer a lot more flexibility and ELSS mutual funds come with a three-year lock-in. These funds have a minimum lock-in period amongst various tax saving options available under Section other retirement savings options are also available, Thakurta advices investors to definitely consider other options as it's better to control their asset allocation at a portfolio level, where they can divide their money into three baskets, with a mix of equity and debt as they have a low correlation with each other. For equity, investors can consider equity mutual funds from diversified categories and for the long-term basket, meant for retirement, can have an 80:20 mix of equity and debt, the expert further adds that the medium-term basket, for the longer-term needs, can be 70:30 in equity and debt and the short-term basket should be fully in debt, meant for any near-term expenses as this way, one gets the flexibility to manage short-term liquidity while also generating wealth over the long term through the power of is a market-linked defined contribution scheme that helps you save for your retirement. The scheme is simple, voluntary, portable and flexible. It is one of the most efficient ways of boosting your retirement income and saving tax. It allows you to plan for a financially secure retirement with systematic savings in a planned way, according to the NPS Trust at how the macro environment is evolving, with GDP growth at 6.5% for FY25 and projected to rise to 6.6% next year, inflation well under control, and strong tax collections, it is clear that the market is on a healthy growth path and in this context, NPS may not be the most efficient vehicle to benefit from this momentum, Thakurta mentioned. He further informs that most NPS equity funds tend to stick to large cap allocations and have a fixed structure, which limits flexibility and the ability to optimise returns and there is also the lock-in until retirement and the compulsory annuity purchase, which can restrict an investor's options. 'Mutual funds, in contrast, offer liquidity, a wide choice of categories and the flexibility to adapt to changing market cycles. For long-term investors, mutual funds are better suited to help generate wealth over the long term,' he added. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@ alongwith your age, risk profile, and Twitter handle.
Time of India
15 hours ago
- Business
- Time of India
NPS equity funds see low single-digit returns in 1 year. Is it time to review your retirement strategy?
NPS equity funds have delivered low single-digit returns over the past year and according to market experts, this underperformance can be attributed to the current neutral market phase impacted by geopolitical tensions, as well as the structural limitations of the NPS framework. 'The market right now is in a neutral phase, impacted by geopolitical crisis, US tariff expectations and weak earnings in key sectors such as IT and financials, both of which form a significant portion of NPS equity portfolios. Another thing to keep in mind is the structure of NPS itself,' Arjun Guha Thakurta, Executive Director at Anand Rathi Wealth Limited shared with ETMutualFunds. 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View Details » According to the structure of NPS, about 20-25% of the portfolio is mandatorily in debt, which typically won't go beyond 7–8% returns therefore, the real growth engine is the 50-75% in equity, and that's been playing around market volatility lately. 'Also, since most NPS equity funds invest heavily in large caps, nearly 70% of the portfolio, they miss out on the higher growth potential that mid and small caps have delivered over time. Together, these factors have resulted in lower returns,' he added. Out of 10 NPS fund managers, nine have offered upto single-digit returns, one delivered negative return in the same period, according to data provided to ET by Value Research . DSP Pension Fund , relatively a new entrant, has offered the highest return of around 8.90% in the last one year. Kotak Pension Fund offered a return of 3.90% in the last one year period. Live Events Three fund managers - HDFC Pension Fund, ICICI Prudential Pension Fund, and UTI Pension Fund offered 2.52%, 2.22%, and 2.17% returns respectively in the said time period. LIC Pension Fund and ABSL Pension Scheme offered 1.88% and 1.39% returns respectively in the last one year. Axis Pension Fund and Tata Pension Management offered 0.93% and 0.83% returns respectively in the said period. And lastly, SBI Pension Fund offered a negative return of 1.15% in the said period. Post looking at the performance of NPS equity funds, should one consider rebalancing their asset allocation and what is the ideal time to hold onto equity investments in NPS to potentially see meaningful growth, Thakurta recommends that a better approach is to manage the overall allocation at a portfolio level as this allows an investor to align their equity and debt exposure with your goals, investment horizon and risk appetite more effectively. He further adds that NPS can be compared to a hybrid fund with a lock in, where you don't have full control over asset allocation along with compromised liquidity. In NPS, the subscriber is required to decide investment choice whether active choice or auto choice. In active choice, a subscriber has the right to actively decide as to how the contribution is to be invested based on their personal preference. In this, subscribers can select multiple asset classes under a single pension fund manager. Upto 50 years of age, the maximum permitted equity investment is 75% of the total asset allocation. From 51 years and above, maximum permitted equity iInvestment differs. Percentage contribution value cannot exceed 5% for Alternative Investment Funds. The total allocation across equity and related instruments, corporate debt and related instruments, government bonds and related instruments and alternative investment funds including instruments like CMBS, MBS, REITS, AIFs, Invlts etc asset classes must be equal to 100% On the other hand, in auto choice, the investments will be made in a life-cycle fund and the proportion of funds invested across three asset classes will be determined by a pre-defined portfolio. Also Read | Consistent performers: Over 40 equity mutual funds offer over 15% CAGR in 3, 5, 7 and 10 year horizons NPS is focused on saving for retirement whereas mutual funds help investors to plan for different financial goals. The NPS scheme has a certain maturity period of 60 years and withdrawal restrictions. Mutual funds offer a lot more flexibility and ELSS mutual funds come with a three-year lock-in. These funds have a minimum lock-in period amongst various tax saving options available under Section 80C. As other retirement savings options are also available, Thakurta advices investors to definitely consider other options as it's better to control their asset allocation at a portfolio level, where they can divide their money into three baskets, with a mix of equity and debt as they have a low correlation with each other. For equity, investors can consider equity mutual funds from diversified categories and for the long-term basket, meant for retirement, can have an 80:20 mix of equity and debt, the expert advised. He further adds that the medium-term basket, for the longer-term needs, can be 70:30 in equity and debt and the short-term basket should be fully in debt, meant for any near-term expenses as this way, one gets the flexibility to manage short-term liquidity while also generating wealth over the long term through the power of compounding. NPS is a market-linked defined contribution scheme that helps you save for your retirement. The scheme is simple, voluntary, portable and flexible. It is one of the most efficient ways of boosting your retirement income and saving tax. It allows you to plan for a financially secure retirement with systematic savings in a planned way, according to the NPS Trust website. Looking at how the macro environment is evolving, with GDP growth at 6.5% for FY25 and projected to rise to 6.6% next year, inflation well under control, and strong tax collections, it is clear that the market is on a healthy growth path and in this context, NPS may not be the most efficient vehicle to benefit from this momentum, Thakurta mentioned. He further informs that most NPS equity funds tend to stick to large cap allocations and have a fixed structure, which limits flexibility and the ability to optimise returns and there is also the lock-in until retirement and the compulsory annuity purchase, which can restrict an investor's options. 'Mutual funds, in contrast, offer liquidity, a wide choice of categories and the flexibility to adapt to changing market cycles. For long-term investors, mutual funds are better suited to help generate wealth over the long term,' he added. ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@ alongwith your age, risk profile, and Twitter handle.
Time of India
2 days ago
- Business
- Time of India
Consistent performers: Over 40 equity mutual funds offer over 15% CAGR in 3, 5, 7 and 10 year horizons
A recent analysis by ET Mutual Funds reveals that nearly 41 equity mutual funds have consistently delivered over 15% CAGR across the last three, five, seven, and ten years. Quant Mutual Fund leads with six such schemes, followed by several fund houses with three qualifying funds each. Edelweiss Mid Cap Fund stood out with impressive returns across all timeframes. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Nearly 41 equity mutual funds have delivered over 15% CAGR over the last three, five, seven, and 10 years, according to a data analysis by ET Mutual Funds . Of the total, around 156 funds have completed 10 years of existence in the analysis showed that the maximum number of such funds came from Quant Mutual Fund , with six of its schemes generating over 15% CAGR across all four time horizons. This was followed by five fund houses, each with three qualifying mid-cap and small-cap funds from Axis Mutual Fund delivered over 15% CAGR across the three-, five-, seven-, and 10-year periods. Similarly, DSP ELSS Tax Saver Fund and DSP Small Cap Fund also exceeded the 15% CAGR mark in all four time frames. Edelweiss Mid Cap Fund stood out with returns of 26.39%, 31.28%, 19.94%, and 17.42% over the last three, five, seven, and 10 years, three funds from HDFC Mutual Fund that featured in the list of funds delivering over 15% CAGR across all the mentioned time horizons were HDFC Flexi Cap Fund, HDFC Mid Cap Fund, and HDFC Small Cap Prudential Large & Mid Cap Fund, ICICI Prudential Midcap Fund, and ICICI Prudential Smallcap Fund also managed to deliver more than 15% CAGR in all four three funds from Kotak Mutual Fund that made it to the list were Kotak Contra Fund, Kotak Midcap Fund, and Kotak Small Cap Fund. Nippon India Growth Mid Cap Fund and Nippon India Small Cap Fund also delivered over 15% CAGR in the last three, five, seven, and 10 years. Notably, Nippon India Small Cap Fund is the largest small-cap fund based on assets under management. Parag Parikh Flexi Cap Fund , the largest active and flexi cap fund based on assets managed, offered over 15% CAGR across all the mentioned six funds from Quant Mutual Fund that delivered more than 15% CAGR across all four horizons were Quant ELSS Tax Saver Fund, Quant Flexi Cap Fund, Quant Large & Mid Cap Fund, Quant Mid Cap Fund, Quant Multi Cap Fund, and Quant Small Cap Fund SBI Contra Fund, the largest and oldest contra fund, delivered CAGR returns of 22.61%, 31.28%, 19.45%, and 15.66% over the last three, five, seven, and 10 years, respectively. SBI Small Cap Fund and Tata Mid Cap Fund also featured in the list, offering over 15% CAGR in all four time the last three years, Invesco India Midcap Fund delivered the highest return of 29.77%, while Quant Multi Cap Fund posted the lowest at 15.35%. Over the last five years, Quant Small Cap Fund topped the chart with a CAGR of 40.63%, whereas 360 ONE Focused Fund gave the lowest return at 21.92% Small Cap Fund also led the seven-year category with a 25.91% CAGR, while Canara Robeco Large and Mid Cap Fund recorded the lowest CAGR at around 15.20%. In the 10-year horizon, Nippon India Small Cap Fund was the top performer, offering a 20.89% CAGR, while Kotak Contra Fund delivered the lowest at approximately 15% important to note that several funds offered over 15% CAGR in one, two, or three of the mentioned horizons but were excluded from the list, as only those consistently delivering over 15% CAGR across all four timeframes were analysis included all equity mutual funds, excluding sectoral and thematic funds. Only regular growth options were considered. CAGR was calculated for the last three, five, seven, and 10 This analysis is not a recommendation. It was conducted to identify consistent equity mutual fund performers offering over 15% CAGR across all four time horizons. Investors should not make investment or redemption decisions based solely on this consider your risk appetite, investment horizon, and financial goals before making any investment decisions.: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
Economic Times
3 days ago
- Business
- Economic Times
SBI FDs offer up to 6% returns in short term. Should investors explore debt mutual funds instead?
State Bank of India cuts fixed deposit rates. Experts suggest debt mutual funds may offer better post-tax returns. With SBI, the largest public sector lender, reducing interest rate on certain short-term tenure fixed deposits by 15 basis points for three tenures, mutual fund experts mentions that followed by the recent repo rate cut by the central bank, many banks are cutting their FD interest rates, making traditional FDs less attractive and short term debt mutual funds such as liquid funds and overnight funds may give better post-tax returns. 'Liquid funds and overnight funds may well give better post-tax returns to especially those at higher tax brackets while offering similar liquidity. Those in the 20%+ tax bracket could opt for hybrid Arbitrage funds for better taxation. Please also note that interest on FDs is taxable even on an accrual basis, whereas in case of mutual funds it is only when redeemed,' Rajesh Minocha, a Certified Financial Planner (CFP), Founder of Financial Radiance shared with ETMutualFunds. Also Read | Explained: What is loan against mutual funds, and how do they work? Another expert recommends best suited funds for investors with an investment horizon of up to six months and for the ones with an investment horizon of more than six months.'Investors looking for short-term parking options may consider alternatives like ultra-short duration funds for periods up to 6 months, as they offer potentially better post-tax returns. For investment horizons above 6 months, arbitrage funds can be a more efficient option. They carry similar risk profiles to debt funds but may deliver slightly better returns,' Hrishikesh Palve, Director at Anand Rathi Wealth Limited told ETMutualFunds. SBI has reduced the FD rates by 15 basis points for three short-term tenures. The bank has reduced the interest rate for the tenure of 46 days to 179 days from 5.05% to 4.90% for general citizens. The FD interest rate for tenure between 180 days and 210 days has been reduced from 5.80% to 5.65%. For the tenure of 211 days to less than 1 year, the bank has lowered the rate from 6.05% to 5.90% for general citizens. These new interest rates are effective from July 15. In case of senior citizens, the FD rates have been reduced by 15 bps as well for the same to a report by ETWealth, After revision, the bank is offering FD interest rate between 3.05% and 6.45% (excluding Amrit Vrishti rates) for general citizens. The interest rate is applicable FD tenure ranging between 7 days and 10 years. For senior citizens, the bank offers FD interest rate between 3.55% and 7.05% (including SBI WeCare) for the same tenure. Coming to the comparison between fixed deposits and debt mutual funds, fixed deposits are considered low risk investments as they offer a guaranteed return for the predetermined period whereas debt mutual funds have a slightly higher risk associated with them because of the interest rate movement. The second point of difference comes on the taxation part. The investment in tax-saving fixed deposits is exempted under Section 80 C of the Income Tax Act whereas for the debt mutual funds there is no such exemption. But both fixed deposits and debt mutual funds are classified under the same asset SBI slashed rates and experts recommended debt mutual funds as an option for short-term goals, investors are wondering that how does the tax efficiency of short-term debt funds compare to these FDs for someone in the higher tax bracket, to which Minocha replies that though the indexation benefit is removed from the debt funds, their taxation will still be better as they are taxed only when Palve is of the view that for someone in a higher tax bracket, investing in debt funds or FDs doesn't offer much difference in terms of tax efficiency, since gains from both are now taxed as per the individual's income tax slab. However, investors in this category can consider alternatives like arbitrage funds, as these funds carry a similar level of risk to debt funds but have the potential to offer better post-tax returns due to favorable taxation, making them more tax-efficient options for short-term investments, he added. Also Read | Sebi proposes changes in categorization and rationalization of mutual fund schemes ETMutualFunds considered the performance of debt mutual funds in the last one year and found that around 312 debt mutual funds have marked their presence in the market for around one year. Out of these 312 funds, 310 gave over 5.9% return. Around 17 funds gave double-digit returns in the last one Credit Risk Fund offered the highest return of around 22.9% in the last one year, followed by HSBC Credit Risk Fund which gave 21.4% return in the same Birla SL Credit Risk Fund and Aditya Birla SL Medium Term Plan gave 16.9% and 13.9% returns respectively in the same funds - DSP 10Y G-Sec Fund, Baroda BNP Paribas Corp Bond Fund, and Nippon India Dynamic Bond Fund - gave 10% each and were the last ones to offer double-digit returns. ITI Overnight Fund gave a return of 6% in the last one Overnight Fund and Motilal Oswal Ultra Short Term Fund offered equivalent returns to the FD interest rate in the last one year. The schemes gave 5.9% each in the said time generally consider overnight and liquid funds as an option for parking idle savings outside the world of banking. For a savings account alternative, safety and liquidity must take priority over anything else and liquid funds and overnight funds come closest to satisfying these discussing mutual fund categories that can now be considered a superior alternative to short-term FDs, especially for emergency funds, both the experts recommend liquid funds and ultra short duration funds and ultra-short duration funds could indeed confer superior tax efficiencies, daily liquidity and no penalty if redeemed earlier, and marginally better returns than short-term fixed deposits and for those above 20% tax bracket could consider arbitrage funds, is what Minocha similar opinion, Palve said for short-term goals and emergency funds, liquid funds & ultra-short duration funds can be a strong alternative to fixed deposits as they typically invest in debt and money market instruments with a duration of 3 to 6 months, offering better post-tax returns and higher liquidity and are especially suitable for investors in higher tax brackets, as they can deliver slightly better returns than FDs while maintaining a low-risk data from Association of Mutual Funds in India (AMFI) shows that mutual fund investors have realigned their short-term investments, pulling money out of liquid and overnight funds amid changing preferences as these categories together have witnessed an outflow of more than Rs 81,000 crore in the last two months - May and the last two months, liquid funds have seen an outflow of Rs 16,274 crore and overnight funds saw an outflow of Rs 65,401 the contrary, money market funds have been receiving huge inflows. Based on the data, money market funds have received the second highest inflows in the last three months - April, May and June within 16-sub categories in debt mutual May, corporate bond funds received the highest inflow of Rs 11,983 crore among 16-sub categories whereas in June, short duration funds received the highest inflow of Rs 10,276 crore. Also Read | NFO Insight: Capitalmind Mutual Fund's flexi cap fund opens for subscription. Will it help to manage current market volatility? As corporate bond funds and short duration funds are also gaining investors' interest, can these be considered to park idle cash with liquidity and slightly better returns to which Minocha recommends that liquid funds, ultra-short funds, short-duration and arbitrage funds will give better post-tax returns with a reasonable degree of liquidity and fair safety, ideal for parking idle Palve says that with falling FD rates, investors can consider mutual funds as a better alternative to park idle cash but being selective is important. 'For an investment horizon of up to 1–6 months, ultra-short duration funds are suitable as they offer good liquidity and stable returns. For horizons above 6 months, arbitrage funds work well since they provide slightly better return potential than traditional debt funds, with comparable risk and better tax efficiency,' Palve considered all debt categories such as gilt fund, long duration, medium to long duration, gilt fund - constant maturity 10 year, credit risk funds, liquid funds, money market funds, overnight funds, corporate bond fund, dynamic bond fund, floating rate bond, banking and PSU funds, medium duration, low duration, short duration funds. We excluded debt based target maturity funds. We considered regular and growth calculated returns for one year. We calculated simple annualised returns as in debt mutual funds, returns up to one year are annualised and above one year are CAGR. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@ alongwith your age, risk profile, and Twitter handle.
