A low risk mutual fund is a fund that has a stable returns. However the risk levels are low.
Mutual funds for all your goals
Top ELSS funds to save tax the smart way
Top liquid funds for life's surprise expenses
Under 1 year
Create custom plans for your dreams
Top Best Low Risk Mutual Funds for long-term growth
Till Date CAGR
|Nippon India Arbitrage Fund (G)|
|HDFC Overnight fund (G)|
|Aditya Birla Sun Life Arbitrage Fund (G)|
|SBI Overnight Fund (G)|
|L&T Arbitrage Opportunities Fund (G)|
|Kotak Equity Arbitrage Fund (G)|
|Edelweiss Arbitrage Fund (G)|
|ICICI Prudential Equity Arbitrage Fund Institutional Plan (G)|
|L&T Overnight Fund (G)|
|HDFC Arbitrage Fund Retail (G)|
|UTI Arbitrage Fund (G)|
|HDFC Arbitrage Fund Wholesale Plan (G)|
|ICICI Prudential Equity Arbitrage Fund (G)|
|Axis Arbitrage fund (G)|
|Quantum Liquid Fund (G)|
|IDFC Arbitrage Fund (G)|
|PGIM India Arbitrage Fund (G)|
|Baroda BNP Paribas Arbitrage fund (G)|
|Invesco India Arbitrage Fund (G)|
|UTI Overnight Fund (G)|
All Mutual fund investments are subject to risk. Each fund, however, will have a different level of risk associated with them – Low risk, moderate risk, high risk etc.
This is communicated through product Labeling for every mutual fund through its risk-o-meter. It depicts the risk level of a scheme. Low risk funds are investment options with minimal risk when compared to high risk equity schemes.
Low risk funds are majorly debt funds that invest across government schemes, money market instruments, etc. This article covers low risk mutual funds, their features and who should invest in them.
Best Mutual Funds with Lowest Risk to Invest in 2022
|Fund Name||Till Date CAGR||Expense Ratio|
|Nippon India Arbitrage Fund||6.9%||1.06%|
|HDFC Overnight fund||5.8%||0.2%|
|SBI Overnight Fund||6.5%||0.18%|
|Kotak Equity Arbitrage Fund||6.9%||1.01%|
|ICICI Prudential Equity Arbitrage Fund Institutional Plan||7.5%||0.98%|
Low risk mutual funds offer more or less stable returns. However, this doesn’t mean that the schemes are risk-free. Low risk funds offer higher returns and are comparatively more tax-efficient than traditional investments like fixed deposits. Therefore, the schemes are suitable for risk-averse investors.
Debt funds are low risk mutual funds that invest in money market instruments, government bonds, etc. As a result, the risk associated with these instruments is lower. There are multiple schemes under the debt funds category. Some of which are liquid funds, dynamic bond funds, gilt funds, ultra-short-term funds, etc.
Debt funds normally come with some amount of interest rate risk and credit risk. However, investing in higher rated bonds will help in addressing the associated risk.
Since these funds carry minimum risk and aim to offer optimal returns, they are a good option to park idle money for short durations.
Following are the features of Low Risk Mutual Funds: