Mutual funds have gained a lot of popularity in the past decade or so. It’s a legal way to expand your monetary status. It comprises of capital from different investors managed by money managers. The money that is accumulated is invested again in certain schemes such as stock markets, bonds, money markets, assets, etc.
People often confuse the investment of mutual funds and stock markets. The only similarity that both of them have is the involvement of money. People who believe in savings of money for future, prefer mutual funds as it can be very helpful in fulfilling different life goals.
There are various types of mutual funds. Many reputed banks provide particular types of funds where people can invest their finances as per the interest rates offered. The investors are responsible to choose the best mutual funds among all.
When we talk about long term goals, we certainly refer to the return of money in a lump sum to accumulate for fulfilling dreams of marriage, buying or building a house, pension cases, and many more. This is how investment in mutual funds can help us in the long run.
How does a mutual fund function?
In mutual funds, there are different kind of investors pooled to invest their capitals. They do not have any voting rights. Their only work is to invest their money which is then used by the banks and receive interest as per the terms and conditions. The following is a list of 5 of the best performing mutual funds that will benefit you in the long run.
5 mutual funds for long terms:
For those who don’t like taking risks and are very much into future planning, there are many mutual funds that you can select. Some of them are:
- Hybrid or balanced funds
This is a great mutual fund investment option. The interest rate can be up to 55% of your money which continuously can be used for educational purposes. It is not that risky. Buying a dream home can also be possible with these types of mutual funds.
- Large and small-cap mutual funds
This type of fund is riskier but also generates higher returns. For marriage goals which can be a long term purpose, large-cap mutual funds are very helpful.
- Pension funds
Pension funds can fulfill marriage related money matters. The money invested can bring about financial stability down the line. After retirement, it can be a constant reliable support in the old age.
- Equity and debt funds
Equity is a robust mutual fund plan which is extremely popular among investors all around the world. Debt funds are very fulfilling in returns where the chance of losses are less. The return in these cases can be up to 23.6%.
- Asset allocation fund
It is a flexible fund. They are also similar to hybrid funds and in the long term, it can be very useful. Down payment for your dream house can be implemented with the help of this type of mutual fund with a return of 10%.
Out of all these options, the investor must select the best mutual funds so that there is a balance between the risk and the reward segment equally.