Hi,
Some months ago, I asked in detail about my financial planning. Your suggestions were awesome and have helped me a lot. Thank you very much.
I just need clarification on one aspect. I asked about what instrument to use for rainy day scenarios. You suggested cash + arbitrage funds + liquid funds.
Do liquid funds have any advantage over other debt funds having small or no exit load like ultra-short debt, short-debt or short-term gilt funds? Is there any risk factor involved with these other types? And I'm okay with some risk if it gives me better returns.
Can you suggest please.
Thanks
1 Answers
Hi,
Glad to know that you find my suggestions helpful :)
Liquid funds are considered to be the safest bet (relatively, risk vs return trade off) when compared to other types of Debt funds. They generally do not come with any Exit load.
Kindly note that Liquid funds are also subject to risks and recent negative performance in some funds is a proof of it.
So, I believe that its advisable not to chase for returns if the investment objective is to build Emergency fund.
If you are ok with taking some risk, as suggested you may consider a mix of low risk investment options.
Kindly read :
https://www.relakhs.com/debt-funds-types-benefits-risk-vs-return/
https://www.relakhs.com/list-of-best-investment-options-schemes-in-india/
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