3 year return: Hybrid funds invest in a mix of equity and debt stocks. Hence, it helps in generating additional income as compared to debt funds.
Today’s youth often take care of their own expenses. They save money to buy a car, money for their wedding, money to buy a house. Here is a guide for people who want to invest money in 3 to 4 years.
You can consider investing in hybrid funds instead of borrowing for your goal of three years. Hybrid funds invest in a mix of equity and debt stocks. Hence, it helps in generating additional income as compared to debt funds.
Also, since a portion of the portfolio is invested in equities, they carry a certain amount of risk. But they are mostly manageable.
There are different types of hybrid funds. One is aggressive hybrid funds. In this type of investment, the investment will be allocated more than 70 – 80% to equity in cash. Another type is conservative hybrid funds. These types of investments always provide a higher allocation to debt instruments. It has less investment in equity shares.
Here you can invest in balanced funds. In this way the investor can change the allocation to equity share and debt from time to time based on the market outlook. This means that the allocation of equity and debt is dynamically managed over time. A larger portion of the investment amount can be earmarked for equity allocation when the growth of equity in the market is positive. When the equity market is volatile, the investor may reduce the allocation in equity and increase the debt holdings. Hence, balanced funds are the best option considering the current market conditions.
If your target for demand is three years away, You invest in ICICI Balanced Advantage Fund and Edelweiss Balanced Advantage Fund through SIPs (Systematic Investment Plan) every month. You can invest in Balanced Advantage Funds like Exemption is also available under Income Tax Act 111A.