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Mutual Funds by
Risk

Align your portfolio with your risk-taking ability to avoid surprises and stay committed to your goals.

How to Use Mutual Funds by Risk

Choosing mutual funds based on your risk profile ensures you invest with confidence, and not confusion. If you’re someone who prefers safety and steady returns, low-risk options like liquid or debt funds are a good fit. 

You can choose hybrid mutual funds, which are a mix of equity and debt funds for balanced growth and stability. However, if you’re comfortable with market ups and downs and have a long-term goal, high-risk equity funds can help grow your wealth faster. 

Your risk appetite in mutual funds isn’t fixed – it changes with your income, age, and financial goals. That’s why it’s important to review and adjust your investments regularly. With Mentor Wealth, you don’t have to guess what’s right. Our experts help you identify your risk level, recommend suitable funds, and keep your portfolio aligned with your journey. 

Whether you’re cautious or bold, there’s a fund that fits. All you need is the right guidance to use it well.

Types of Mutual Fund Based on Risk

Mutual funds can be classified by the level of risk mutual funds carry. With a better understanding of your risk appetite, you can choose funds that match their comfort with volatility and return expectations.

1. Low-Risk Mutual Funds

Low-Risk mutual funds include liquid funds, ultra-short-term funds, and debt funds. In these funds, your money is invested in stable instruments like government securities and corporate bonds. While the returns are moderate, they are relatively steady, with low volatility, making them suitable for conservative investors and short-term goals.

2. Medium-Risk Mutual Funds

If you are looking to invest in Medium-Risk mutual funds, you can invest in Hybrid funds and balanced advantage funds. In these funds, your money is invested in a mix of equities and debt, offering a balance between risk and return. Balanced investors who want growth with stability generally choose these mutual funds.

3. High-Risk Mutual Funds

High-Risk mutual funds are primarily equity mutual funds, which include small-cap, mid-cap, and sectoral funds. These funds offer higher return potential but come with greater market-linked risk. Therefore, these are most suitable for aggressive investors with long-term goals.

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My overall experience with Mentor wealth has been positive. They offer a reliable platform with a wide selection of funds, solid performance, and good customer support.

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Frequently Asked Questions

What does it mean to invest in mutual funds by risk?

With different types of risks in mutual funds, smart investment is crucial. By investing in risk-based mutual funds, you are selecting funds based on how much market fluctuation (risk) you’re comfortable with. Low-risk funds offer more stability, while high-risk funds aim for higher returns but come with more ups and downs. You can connect with financial experts at Mentor Wealth to understand the risks, and ups and downs.

How do I know my risk profile?

You can calculate your risk profile by mapping your age, income, investment horizon, and financial goals. With several online tools, and experts like Mentor Wealth, you can assess your profile and choose the right funds accordingly.

Are high-risk mutual funds bad?

Not at all. High-risk funds like equity funds can deliver better long-term returns, especially for younger investors. The key is to match your risk appetite with your investment timeline and goals.

Can my risk level change over time?

Yes. As your income grows, responsibilities change, or you near retirement, your ability and willingness to take risks may change. Your mutual fund portfolio should evolve accordingly.

What if I choose the wrong risk level?

Choosing a fund beyond your comfort level can lead to panic decisions. That’s why Mentor Wealth helps you invest smartly by selecting and reviewing funds that truly suit your risk appetite.

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