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Expert Tips For Investing in Low-Risk High-Return Mutual Funds

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Created on
May 11, 2023


What’s Inside

Whether you aim for long-term gains or build a nest egg, investing in mutual funds can achieve your financial goals. But it requires finding suitable low-risk, high-return mutual funds and maximising your returns via careful research and strategic decision-making.

Let’s look at the valuable insights to navigate the world of high-return mutual funds in India for the best returns.

Practical Tips for Investing in Low-Risk High-Return Mutual Funds

High-return mutual funds come in various types, each with its investment strategy and risk profile. Most high-return funds are equity funds that focus on investing in stocks. Sector-specific funds concentrate on industries such as technology, healthcare, or energy.

Test Risk Appetite and Expectation

Before investing in any mutual fund, identify your risk tolerance. Low-risk investments typically offer more stable returns. But they may also offer lower potential returns compared to higher-risk investments.

Hence, setting realistic expectations and determining how comfortable you’re with risk is crucial. Once you understand both factors, select the appropriate mutual fund that aligns with your profile.

Diversify Your Investments

You should conduct thorough research on different high-risk, high-return mutual funds to find ones delivering consistent results. Look for funds with a solid track record that outperformed their benchmarks over time. Always aim to diversify your investments by spreading your money across different mutual funds. It reduces the impact of any single fund's performance on your overall portfolio.

Opt for SIP Mode

A Systematic Investment Plan (SIP) helps an investor maintain discipline in investments. Besides, it spares the investor to time the market and gives the benefit of compounding. You can start a SIP investment monthly, making it one of the most attractive ways to park your money in markets.

Choosing Direct Plans Over Regular Plans

Why give a broker or agent a brokerage fee on investment when you can buy funds from AMCs? Regular plans change brokerage fees from investors. You can buy desired high-return mutual funds in India by visiting the AMC website. You can also invest using different mutual fund tools for direct buying.

Periodic Review and Rebalancing

While mutual funds don’t need daily reviews like share trading, period review ensures better returns. Review your fund’s performance every six months or a year and rebalance the portfolio as your risk appetite and financial goals change. It helps in earning the best returns throughout the investment tenure.

High Return Mutual Funds Investment - Wrapping Up

Research is crucial for investors to gain confidence and understand the market. Check the options available before picking the best low-risk, high-return mutual funds for investment. After narrowing down the mutual funds, check the fund history, analyse your risk appetite, and create a mutual fund portfolio that suits your goals.

Fi Money offers the best online tool to invest in mutual funds commission-free. With its intuitive user interface, analyse and select from over 800 direct Mutual Funds. Fi Money is 100% secure and helps infuse money into mutual funds via automatic payments or SIPs.

Frequently Asked Questions

What are high-return mutual funds, and how do they differ from other mutual funds?

High-return mutual funds carry high risks. They often invest in equity funds known for their risk-reward dynamic. While you may profit through these funds, you may lose money due to increased risks. High-return funds are suitable for investors with an aggressive risk appetite.

What factors should investors consider when selecting high-return mutual funds, and how can they evaluate their potential returns?

Like any other mutual-fund investment, investors should take suitable measures before investing in high-return funds. These factors are:

  • Identifying your investment objectives
  • Estimating your time horizon
  • Determining the risk appetite

Investors can check their potential returns on mutual funds by considering essential factors like historical performance, expense ratio, fund manager’s track record, risk assessment, etc.

What risks are associated with investing in high-return mutual funds, and how can investors manage these risks?

Investing in high-return mutual funds may earn significant gains. But they have certain risks associated. Some of these risk factors involve market, liquidity, credit, inflation, and rebalancing risks.

But you can combat these risks by investing through SIP in line with your risk appetite and diversifying the portfolio. You can take expert advice consulting with a financial advisor to manage these risks.

How can investors maximise their returns when investing in high-return mutual funds, and what strategies should they use?

You can consider five things to maximise your return, including -

  • Going the SIP route
  • Portfolio diversification
  • Reviewing fund performance at regular intervals
  • Having an exit plan
  • Choosing direct plans over regular ones

Experts recommend reviewing your portfolio once or twice a year and making changes as an effective strategy to get the best returns.


Investment and securities are subject to market risks. Please read all the related documents carefully before investing. The contents of this article are for informational purposes only, and not to be taken as a recommendation to buy or sell securities, mutual funds, or any other financial products.
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