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Gilt mutual funds are considered ideal for long-term debt mutual fund investors with an aggressive risk profile. However, these schemes are extremely sensitive to interest rate environment.

In the past five-year and ten-year periods, the scheme has given 6.5% and 9.6% returns, respectively, while its peers have given average returns of 1.6 % and 6.3%, respectively, over the same periods.

In times when estimates and assumptions are being questioned or proven wrong consistently due to unforeseen factors, it makes sense to stick with equity schemes that have been through long market cycles. Schemes which have been in existence for more than 15 years is a good criterion.

ICICI Prudential Balanced Advantage has given returns of 7.2%, 11.5% and 11.4% in the past five-year, seven-year and 10-year periods, while its peers have given an average return of 5.8%, 10.2% and 8.9% respectively over the same periods.

Motilal Oswal Midcap 30 Fund: Fund review

The five-year-old fund has beaten its benchmark S&P BSE 150 Midcap TRI over 1-, 3- and 5-year periods. Although it is the topper in one-year return, it lags peers in 3- and 5-year return.

The NFO of Sundaram Balanced Advantage Fund would remain open for subscription till February 28. The scheme reopens for ongoing subscription and redemption from March 12.

Here is our monthly update on arbitrage funds for May.

As per Sebi norms, corporate bond funds have the mandate to invest at least 80% of their corpus in the highest-rated corporate bonds. That means these schemes would invest most of their corpus in corporate bonds that are rated AAA.

Investors can consider multi-asset schemes, which have exposure to equity, debt and commodities. This provides stronger diversification than just plain balanced plans.

Best short duration or short term mutual fund schemes to invest in 2020

Mutual fund managers and advisors recommend short duration mutual fund schemes to conservative investors looking to invest in debt mutual funds for a year or two.

In the past five-year and 10-year periods, the scheme has given 10.5% and 17.5%, respectively. Its peers in the same periods have given average return of 7.8% and 10.5%, respectively.

Conservative hybrid funds invest mostly in debt instruments and a small part of their corpus in stocks. These schemes invest 75-90 per cent of the corpus in debt instruments and 10-25 per cent of the corpus in equity or stocks.

Did large-caps beat mid- and small-caps? Which mutual fund houses boasted of superior performance? Though benchmark indices shot up in 2019, the broader market didn’t do too well. ET Wealth analyses the returns of diversified equity mutual funds across time periods.

If you are a conservative equity investor looking to grow your investment without too much volatility over a long period, you should consider investing in aggressive hybrid schemes.

Kotak Standard Multicap Fund: Fund Review

Among multi-cap schemes, Kotak Standard Mulitcap is a stable performer in longer duration cycles of markets. The scheme’s fund manager Harsha Upadhyaya has been careful in the construction of the portfolio.

"Axis All Seasons Debt Fund FOF is a unique product in the debt basket. It aims at adequate diversification. Especially at this point when there is a lot of confusion among investors about debt funds, this can be a go to scheme."

Two of our recommended schemes - Aditya Birla Sun Life Equity Fund and Motilal Oswal Multicap 35 Fund - are in the last quartile this month, too.

Among infrastructure-focused mutual fund schemes, Franklin Build India has been top performer in the past five-year and 10-year periods within the category of infrastructure-dedicated schemes.

L&T Emerging Business Fund has been in the third quartile of the performance chart for the last two months. We are watching the fund closely and we will update you on its performance every month.

Best mid cap mutual funds to invest in 2020

If you are a new mutual fund investor, you should avoid investing in mid cap schemes. Start with relatively-safer large cap mutual funds, gain some experience before venturing into the mid cap space.

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