Ask Value Research

Not Without Risk

Mutual funds are subject to risks; know about the risks before investing

I have Rs 5 lakh that I want to invest I a good mutual fund for a year, with the guarantee on my principal. What is the best fund that I can invest in?
- Mohan Singh

There are no risk-free mutual funds. All mutual funds come with an element of risk; the risk can vary from being less to high, but it cannot be sans risk. Since you do not want to take risk on your principal amount, mutual funds are not the right product for you. You should consider investing in a bank fixed deposit as it will give you the guarantee of safety that you seek.

This article was originally published on January 14, 2011.

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