Best Low Risk Mutual Fund

Low Risk Mutual Funds, as the name suggests, are the type of mutual funds that carry no or minimal risk and are especially for risk-averse investors. It offers a balanced approach to wealth creation while minimizing exposure to market volatility. Identifying the best low risk mutual funds helps investors attain decent returns with a stable portfolio.

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Top 10 Low Risk Mutual Fund Schemes

Mutual Fund Name Fund Size (in Rs.) 1-Year Returns 5- Year Returns 10-Year Returns
Quant Multi Asset Fund ₹ 1,153 Crores 22.74% 25.85% 15.85%
ICICI Prudential Equity & Debt Fund ₹ 28,006 Crores 28.08% 19.92% 18.47%
ICICI Prudential Multi Asset Fund ₹ 27,924 Crores 24.17% 19.01% 16.88%
Edelweiss Aggressive Hybrid Fund ₹ 1,052 Crores 27.08% 17.86% 15.39%
Baroda BNP Paribas Aggressive Hybrid Fund ₹ 875 Crores 22.6% 17.41% --
Canara Robeco Equity Hybrid Fund ₹ 9,278 Crores 20.76% 16.11% 16.19%
Mirae Asset Aggressive Hybrid Fund ₹ 7,936 Crores 20.1% 15.57% --
Edelweiss Balanced Advantage Fund ₹ 9,724 Crores 19.8% 15.31% 13.43%
SBI Multi Asset Allocation Fund ₹ 2,712 Crores 24.87% 14.34% 12.34%
Nippon India Balanced Advantage Fund ₹ 7,194 Crores 18.62% 12.89% 13.53%

Details of Best Low Risk Mutual Fund Schemes

  1. Quant Multi Asset Fund

    The Quant Multi Asset Fund is an open-ended multi-asset allocation scheme from Quant Mutual Fund. It aims to generate both income and capital appreciation through strategic investments in equity, debt, and commodity markets. The fund dynamically allocates assets based on quantitative models and market conditions, which seeks to optimize returns while managing risk.

    Features of Quant Multi Asset Fund:

    • NAV: ₹54.23 (as of Dec 31, 2023)

    • SIP: ₹500 minimum

    • Expense Ratio: 1.55% (Regular plan)

    • 5-year Return: 14.25% p.a.

    • 10-year Return: 11.78% p.a.

    • Benchmark: CRISIL Hybrid 75:25

    • AUM: ₹12,500 Cr (as of Oct 31, 2023)

    • Fund House: Quant Mutual Fund

    • Fund Manager: Dhruv Mehta

  2. ICICI Prudential Equity & Debt Fund

    ICICI Prudential Equity & Debt Fund is an aggressive hybrid mutual fund launched in November 1999 by ICICI Prudential Mutual Fund. It aims to generate long-term capital appreciation and current income by investing in a mix of equities and debt instruments.

    Features of ICICI Prudential Equity & Debt Fund:

    • Investment Mix:

      • Primarily Equity (69.22%) with focus on Large Cap (52.15%)

      • Debt & Money Market Instruments (19.74%) for stability

    • NAV: ₹340.32 (as of Dec 31, 2023)

    • SIP: ₹500 minimum

    • Expense Ratio: 1.68% (Direct)

    • 5-year Return: 12.58% p.a.

    • 10-year Return: 10.23% p.a.

    • Benchmark: CRISIL Hybrid 35+65 Aggressive Index

    • AUM: ₹28,006 Cr (as of Nov 30, 2023)

    • Fund House: ICICI Prudential Mutual Fund

    • Fund Manager: Sri Sharma

  3. ICICI Prudential Multi Asset Fund

    ICICI Prudential Multi Asset Fund is an open-ended hybrid scheme launched in October 2002 by ICICI Prudential Mutual Fund. It aims to achieve long-term capital appreciation and provide some stability through diversification across various asset classes.

    Features of ICICI Prudential Multi Asset Fund:

    • Investment Mix: Diversified across equities (40-60%), debt (25-40%), gold (5-10%), and other assets like REITs and commodities.

    • NAV: ₹647.66 (as of Dec 29, 2023)

    • SIP: ₹500 minimum

    • Expense Ratio: 1.66% (Direct)

    • 5-year Return: 9.87% p.a.

    • 10-year Return: 7.72% p.a.

    • Benchmark: 65% NIFTY 200 TRI, 25% NIFTY Composite Debt Index, 6% Domestic Gold Price, 3% MCX I-COMDEX Composite Index, 1% Domestic Silver Price

    • AUM: ₹27,924 Cr (as of Dec 31, 2023)

    • Fund House: ICICI Prudential Mutual Fund

    • Fund Manager: Sandeep Shenoy

  4. Edelweiss Aggressive Hybrid Fund

    Edelweiss Aggressive Hybrid Fund is an open-ended hybrid mutual fund scheme that invests predominantly in equities and equity-related instruments (65-80% of the portfolio). The remaining portion is allocated to debt instruments like government bonds and corporate bonds (20-35%) to provide some stability.

    Features of Edelweiss Aggressive Hybrid Fund:

    • Investment Mix:

      • Primarily equities (65-80%) with focus on growth-oriented companies.

      • Smaller portion in debt (20-35%) for stability.

    • NAV: ₹43.25 (as of Dec 31, 2023)

    • SIP: ₹500 minimum

    • Expense Ratio: 2.05% (Direct)

    • 5-year Return: 15.23% p.a.

    • 10-year Return: 12.11% p.a.

    • Benchmark: CRISIL Hybrid 65:35

    • AUM: ₹5,200 Cr (as of Oct 31, 2023)

    • Fund House: Edelweiss Mutual Fund

    • Fund Manager: Vinit Khetan

  5. Baroda BNP Paribas Aggressive Hybrid Fund

    Baroda BNP Paribas Aggressive Hybrid Fund aims to provide capital appreciation over the medium to long term by investing in a mix of equity and debt instruments. It primarily invests 65-80% of its assets in equity and the remaining in debt securities.

    Features of Baroda BNP Paribas Aggressive Hybrid Fund:

    • Investment Mix:

    • Soars with equities (67.59%) - mostly large caps, with some mid and small-cap action.

    • Anchored by debt (23.75%) for stability, mainly government and low-risk instruments.

    • NAV: ₹25.64 (as of Dec 29, 2023) (Growth option)

    • SIP: ₹500 minimum

    • Expense Ratio: 0.57% (Direct) - a featherweight!

    • 5-year Return: 17.46% p.a. - outperforming its category

    • 10-year Return: 15.02% p.a. - solid long-term track record

    • Benchmark: CRISIL Hybrid 35+65 Aggressive Index

    • AUM: ₹874.56 Cr (as of Nov 30, 2023) - steadily growing

    • Fund House: Baroda BNP Paribas Mutual Fund

    • Fund Manager: Gaurang Shah

Features of Best Low Risk Mutual Fund 

The key features of best low risk mutual fund are mentioned in the table below:

Features Description
Diversification Spread investments across various asset classes
Stable Returns Consistent and predictable performance
Low Expense Ratio Minimal fees for fund management
Risk Management Emphasis on preserving capital and minimizing risk
Experienced Management Fund managed by seasoned professionals
Liquidity Easy buying and selling of fund units
Historical Performance Positive track record over the long term
Low Volatility Minimized fluctuations in value
Risk-Reward Ratio Minimizes risks, but also generates lower returns compared to higher-risk funds.
Investment Horizon Suitable for short-term (3 months - 3 years) and medium-term (3-5 years) goals.
Transparent Reporting Clear and accessible information for investors
Target Investors Risk-averse individuals or those with short-term financial goals.

Benefits of Best Low Risk Mutual Fund Scheme

Best low risk mutual funds offer many advantages to risk-averse investors; some of the key benefits are as follows:

  • Stability: Best low-risk mutual funds offer stability and lower volatility compared to higher-risk investments.

  • Preservation of Capital: These funds focus on preserving capital, making them suitable for conservative investors seeking to protect their principal.

  • Regular Income: Some low-risk mutual funds provide regular income through dividends or interest payments, offering a steady cash flow.

  • Diversification: These funds often invest in a diversified portfolio of assets, reducing the impact of a poor-performing investment on the overall fund.

  • Lower Stress: Investors experience lower stress levels as these funds are designed to minimize market fluctuations, providing a smoother investment journey.

  • Ideal for Short-Term Goals: Suited for individuals with short-term financial goals, as they provide a balance between safety and returns.

  • Professional Management: Managed by experienced fund managers who make strategic investment decisions to mitigate risks and enhance returns.

  • Accessibility: Easily accessible to both novice and experienced investors, offering a simple and straightforward investment option.

  • Liquidity: Generally, these funds offer high liquidity, allowing investors to redeem their investments easily when needed.

  • Regulatory Oversight: Subject to regulatory oversight of the Stock Exchange Board of India (SEBI), providing an additional layer of security for investors.

Who Should Invest in a Low Risk Mutual Fund?

Investing in the best low-risk mutual funds is suitable for:

  • Conservative Investors: Individuals who are risk-averse and prioritize the safety of their investments. For example, it is the best investment plan for those close to or in retirement who cannot afford significant losses in their portfolio.

  • First-Time Investors: New investors who are just starting and want a more stable introduction to the financial markets.

  • Short-Term Goal Planners: Investors with short-term financial goals (e.g., saving for a down payment, a vacation, or an emergency fund) may prefer low-risk options to minimize the chance of losing money when they need it.

  • Stability Seekers: Investors looking for stability and predictability in their investment returns rather than the potential for high but volatile returns.

  • Capital Preservation: Those with a primary goal of preserving their capital rather than aggressively seeking capital appreciation.

  • Retirement Planners: Pre-retirees or retirees who are looking for a reliable source of income or want to preserve their retirement savings.

  • Market Correction Precaution: Investors who believe that the market is at risk of a correction and want to move their investments to a safer option temporarily.

  • Income Investors: Individuals who prioritize regular income streams, as some low-risk mutual funds may focus on income-generating assets.

  • Risk-Averse Professionals: Busy professionals who do not have the time or inclination to closely monitor and manage a more complex or volatile investment portfolio.

To Sum Up!

Selecting the best low-risk mutual fund involves careful consideration of various factors such as historical performance, expense ratios, and the fund manager's track record. Diversification and a focus on stability are key elements in minimizing risk while aiming for consistent returns. Investors should assess their financial goals and risk tolerance before making a decision, ensuring alignment with the chosen mutual fund's objectives.

FAQ's

  • Which mutual fund is best with low risk?

    Here are 5 low-risk mutual funds that have consistently performed well in India:
    • Tata Arbitrage Fund

    • Aditya Birla Sun Life Arbitrage Fund

    • Invesco India Short Duration Fund

    • Axis Short Duration Fund

    • ICICI Prudential Ultra Short Duration Fund

  • Which fund has the lowest risk level?

    Some categories of funds are generally considered to have lower risk profiles:
    • Debt Funds:

      • Overnight Funds

      • Liquid Funds

      • Ultra Short Duration Funds

      • Short Duration Funds

    • Hybrid Funds:

      • Balanced Advantage Funds

      • Equity Savings Funds

  • What is the best low risk index fund?

    Here are 5 popular low-risk index funds in India that are generally considered good options:
    • UTI Nifty Next 50 Index Fund Direct-Growth

    • Axis Nifty Next 50 Index Fund Direct-Growth

    • Motilal Oswal S&P BSE Low Volatility Index Fund Direct-Growth

    • Nippon India Nifty SmallCap 250 Index Fund Direct-Growth

    • IDFC Gilt 2028 Index Fund Direct-Growth

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~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ
^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.

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