How Does Mutual Fund Portfolio Work?
Mutual Funds are a great investment option because they are managed professionally by fund managers who have expertise and access to research and tools. Mutual funds enable better risk management by investing in a diversified collection of assets and provide excellent liquidity as you can redeem your units whenever you need to.
At DBS Treasures, you can choose funds across major categories: Equity, Debt, Balanced and Liquid. Depending on your goals and risk appetite, you can find one that suits your needs.
Equity Funds
Equity funds are those that invest largely in the stock market. Equity funds may be categorised by market cap (large cap, midcap, small cap, etc) or sectoral (banking, infrastructure, pharma etc) or thematic (dividend yield). Equity funds have the potential to provide greater market-linked returns but also carry a higher degree of risk. It’s best to have a long-term view while investing in equity mutual funds.
Debt Funds
Debt funds are those that invest in government securities, bonds, treasury bills and other money market instruments. SEBI has specified 16 categories of debt funds including liquid funds, gilt funds, banking, PSU funds and gilt funds. In general, debt funds tend to provide lower returns at lower risk than equity funds.
Balanced Funds
Balanced Funds invest in both equity and debt with the aim of providing higher returns from equity and lower risk from debt. While choosing hybrid funds, opt for one with a higher proportion of equity if you are willing to take some risk; go with a higher proportion of debt if you want lower risk.
Liquid Funds
Liquid Funds are debt funds that lend to companies for a period of up to 91 days. These are the least risk averse funds amongst all categories.
