Is there a safest mode of investment in mutual funds

Please note that there is absolutely no way or mode of investing in mutual funds which we can call safest. Mutual Fund investments carry market risk and the level of risk depends on the category of funds that you are investing in and the investment horizon.

We find a confusion in your query as you wanted to know about safest mode of investing but you also mentioned that you can take high risk. This bit is really confusing and therefore, we are giving following scenarios / method with regards to your proposed investment of Rs 5 Lakhs in mutual funds –

1. You can invest in a liquid fund and transfer a fixed amount weekly/ fortnightly/ monthly to equity funds or balanced fund. This will help in rupee cost averaging

2. You can invest in a liquid fund and transfer only the profits periodically, say weekly/ fortnightly/ monthly to equity funds or balanced fund. This will help you in protecting the capital and get exposure to equities and earn an overall higher return than liquid funds.

3. You can invest in MIPs or Balanced Funds and get regular returns by way of dividends, in case you need it. Otherwise, invest in lump sum for the long period and get much better return than fixed deposits or traditional saving schemes

4. Since you investment horizon is 15 years you can invest in equity funds also and remain invested to create long term wealth.

5. You can invest in balanced funds or equity funds and draw a fixed amount monthly through SWP in case you requirement is to get regular cash flow from your investments.

As you can see above, in none of the scenarios your capital is safe. But there are scenarios which can minimize the risk upto a greater extent.

Before, adopting any method, know your risk profile and invest accordingly.

Hope the above helps you. Thanks for writing to Advisorkhoj!