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Time of India
28-05-2025
- Business
- Time of India
Best short duration mutual funds to invest in May 2025
Short duration mutual funds invest in treasury bills, commercial papers, certificates of deposits and so on to take care of their liquidity needs. They also invest in corporate bonds, government securities, among others. According to the Sebi mandate, short duration funds can invest in debt instruments which have maturity between one and three years. That means these schemes are meant for short-term investments of up to three years or more. They are somewhat in the middle when it comes to interest rate risk. They are riskier than liquid, ultra short term, and low duration funds. However, they have a lower risk compared to medium duration and long-term funds. Also Read | Nifty up 13% from April's low. How should mutual fund investors alter their investment strategy? Best MF to invest Looking for the best mutual funds to invest? Here are our recommendations. View Details » These schemes invest in both short term bonds and very short term instruments. They invest in treasury bills, commercial papers, certificates of deposits and so on to take care of their liquidity needs. They also invest in corporate bonds, government securities, etc. In short, if you are looking for debt schemes to invest for one to three years without much volatility, you may check out short duration funds. However, make sure to choose schemes that do not take extra risk for extra returns. Safety should be your prime concern when it comes to debt investments. Live Events There is no change in the list. All recommended schemes have performed well. Follow our monthly updates to keep track of the performance of your schemes. Also Read | JioBlackRock Asset Management receives SEBI approval to commence mutual funds business Best short duration funds to invest in May 2025 HDFC Short Term Debt Fund ICICI Prudential Short Term Fund Axis Short Term Fund Methodology: has employed the following parameters for shortlisting the debt mutual fund schemes. 1. Mean rolling returns: Rolled daily for the last three years. 2. Consistency in the last three years: Hurst Exponent, H is used for computing the consistency of a fund. The H exponent is a measure of randomness of NAV series of a fund. Funds with high H tend to exhibit low volatility compared to funds with low H. i)When H = 0.5, the series of returns is said to be a geometric Brownian time series. This type of time series is difficult to forecast. ii)When H <0.5, the series is said to be mean reverting. iii)When H>0.5, the series is said to be persistent. The larger the value of H, the stronger is the trend of the series 3. Downside risk: We have considered only the negative returns given by the mutual fund scheme for this measure. X =Returns below zero Y = Sum of all squares of X Z = Y/number of days taken for computing the ratio Downside risk = Square root of Z 4. Outperformance: Fund Return – Benchmark return. Rolling returns rolled daily is used for computing the return of the fund and the benchmark and subsequently the Active return of the fund. Asset size: For debt funds, the threshold asset size is Rs 50 crore
Time of India
19-05-2025
- Business
- Time of India
Best balanced advantage funds or dynamic asset allocation funds to invest in May 2025
Many mutual fund advisors have been recommending balanced advantage funds to new and inexperienced investors for a while now. These advisors believe that these schemes are ideally placed to take care of the current market conditions because of their dynamic portfolio. Advisors are also recommending these schemes to investors to park their lumpsum amounts. Balanced advantage funds invest in a mix of stocks, debt, and arbitrage opportunities. These funds decide their equity exposure depending on key market ratios or in-house parameters. They invest less in stocks when the market is very high or valuations are stretched. They invest more in equity when stocks are available at attractive valuations. In short, BAFs do the job of juggling equity exposure for investors. Also Read | Sensex @82,300: Should mutual fund investors alter their investment strategy? Best MF to invest Looking for the best mutual funds to invest? Here are our recommendations. View Details » Sure, these funds limit equity exposure based on valuations, but that doesn't make them totally safe. Don't be under the illusion that balanced advantage funds are a safe investment. In fact, many mutual fund distributors make such claims. However, don't be influenced by such talk. Any mutual fund scheme that invests in stocks can't be considered as safe. It also cannot avoid volatility and losses totally. So, invest in balanced advantage funds only if you can tolerate the risk of investing in stocks . Also, invest only if you have an investment horizon of at least five years. Is there anything else you should keep in mind while investing in these schemes? Yes, you should make sure the scheme is practising what it claims to be. Make sure the scheme is rebalancing the portfolio in a timely manner. For example, there are schemes that invest heavily in stocks even when the market is at a higher level or at expensive valuations. You have to make sure that you don't get into such schemes. Live Events If you are planning to invest in balanced advantage schemes, here are our recommended schemes you can consider investing. There are no changes in the list this month. Follow our monthly updates to know how your schemes performed in the previous month. Also Read | These mutual funds added 13 new smallcap stocks to their portfolios in April Best balanced advantage funds to invest in May 2025: Edelweiss Balanced Advantage Fund ICICI Prudential Balanced Advantage Fund Aditya Birla Sun Life Balanced Advantage Fund has employed the following parameters for shortlisting the hybrid mutual fund schemes. 1. Mean rolling returns: Rolled daily for the last three years. 2. Consistency in the last three years: Hurst Exponent, H is used for computing the consistency of a fund. The H exponent is a measure of randomness of NAV series of a fund. Funds with high H tend to exhibit low volatility compared to funds with low H. i) When H = 0.5, the series of return is said to be a geometric Brownian time series. These type of time series is difficult to forecast. ii) When H is less than 0.5, the series is said to be mean reverting. iii) When H is greater than 0.5, the series is said to be persistent. The larger the value of H, the stronger is the trend of the series 3. Downside risk: We have considered only the negative returns given by the mutual fund scheme for this measure. X = Returns below zero Y = Sum of all squares of X Z = Y/number of days taken for computing the ratio Downside risk = Square root of Z 4. Outperformance i) Equity portion: It is measured by Jensen's Alpha for the last three years. Jensen's Alpha shows the risk-adjusted return generated by a mutual fund scheme relative to the expected market return predicted by the Capital Asset Pricing Model (CAPM). Higher Alpha indicates that the portfolio performance has outstripped the returns predicted by the market. Average returns generated by the MF Scheme = [Risk Free Rate + Beta of the MF Scheme * {(Average return of the index - Risk Free Rate} ii) Debt portion: Fund Return – Benchmark return. Rolling returns rolled daily is used for computing the return of the fund and the benchmark and subsequently the Active return of the fund. 5. Asset size: For Hybrid funds, the threshold asset size is Rs 50 crore
Economic Times
29-04-2025
- Business
- Economic Times
Best medium to long duration funds to invest in April 2025
iStock Medium to long duration mutual funds are best suited for investors with a risk appetite and long investment horizon Mutual fund managers and advisors ask conservative debt investors to stick to 'safer' short-term debt funds like overnight funds, liquid funds, short duration funds, among others. That may explain why most mutual fund investors are unaware about the existence of medium to long duration debt mutual to Sebi norms, medium to long term funds have a mandate to invest in debt and money market instruments in such a way that the Macaulay's duration of the portfolio is four to seven years. Since these schemes invest in long-term debt instruments, they are considered risky. Also Read | 19 gold ETFs, one glittering choice: Here's how to pick the best one Even a minor upward movement in interest rates could make these schemes extremely risky and volatile. In simple terms, investors might lose money in such a scenario. That explains why advisors do not speak about these schemes often. Needless to say investors should be extremely cautious about these schemes in the current term debt schemes are extremely sensitive to interest rate changes. They lose money when interest rates go up. When rates are falling, they benefit the most. According to investment experts, when one invests for a long period in debt instruments, the investor is forced to go through an interest cycle that would have an upward and downward phase. This means the investor might see a lot of volatility and sometimes losses when the interest rates start hardening or going up. Needless to say, the opposite scenario might benefit investors. Investment advisors believe that many conservative investors would not be able to go through turbulent phases. Investors can avoid this only if they time their entry and exit into long-term debt funds. Many investors would find it difficult to predict the interest rate movements and getting in and out of the schemes. That explains the advice to stick to short term this doesn't mean that you should not be familiar with the medium and long duration category. Those with a risk appetite and long investment horizon, can invest in these schemes with the help of competent mutual fund advisors. The only basic requirement is that you should be aware of the extra risk in these schemes. Here are our recommended mid to long duration debt Read |Global MFs recover post Tariff lows. How long will momentum sustain?There are no changes in the list this month. All the schemes fared well. Please follow our monthly updates to keep track of your you want to know about our methodology, you can take a look at it. has employed the following parameters for shortlisting the debt mutual fund schemes. 1. Mean rolling returns: Rolled daily for the last three years. 2. Consistency in the last three years: Hurst Exponent, H is used for computing the consistency of a fund. The H exponent is a measure of randomness of NAV series of a fund. Funds with high H tend to exhibit low volatility compared to funds with low H. i)When H = 0.5, the series of returns is said to be a geometric Brownian time series. This type of time series is difficult to forecast. ii)When H <0.5,>iii)When H>0.5, the series is said to be persistent. The larger the value of H, the stronger is the trend of the series 3. Downside risk: We have considered only the negative returns given by the mutual fund scheme for this measure. X =Returns below zeroY = Sum of all squares of XZ = Y/number of days taken for computing the ratioDownside risk = Square root of Z 4. Outperformance: Fund Return – Benchmark return. Rolling returns rolled daily is used for computing the return of the fund and the benchmark and subsequently the Active return of the fund. Asset size: For debt funds, the threshold asset size is Rs 50 crore (Disclaimer: past performance is no guarantee for future performance.) 0.5,>
