As per their investment objectives and risk tolerance, an investor can choose to invest in mutual funds to gain suitable returns in the long run.
However, by adopting a suitable strategy, one can look at making a bit extra in terms of returns. Here’s the lowdown on five different ways to make extra returns on mutual fund investments:
High-risk options: An investor’s risk appetite is an essential factor in determining the returns on mutual funds. In case one has a high-risk appetite, they can look forward to growing their money by investing in mutual funds that provide higher returns. For instance, equity funds are regarded as one of the high-risk options; such schemes can also deliver significant returns. An investor can conduct suitable research related to different equity funds and grow the corpus considerably in the long run.
Make an assessment of financial goals: An investor should assess their financial goals suitably before adopting a decision on investments. The scheme that one chooses should match as per financial goals, and thus, the returns can aid with meeting the financial requirements over a period.
Opt for systematic investment plans (SIPs): These aids monitor investments and put them in a fixed amount at regular intervals. To gain from the maximum interest, an investor can kickstart their journey by investing small amounts on a consistent basis.
Diversify across funds: When starting the investment journey, zero in on the right assets to diversify the overall portfolio. Diversifying across assets aids in mitigating risk, lowering risk and gaining higher returns. For instance, opting for a mix of stocks, bonds, and real estate can significantly increase the chances of earning returns.
Zero in on long-term and low-cost funds: While investing in mutual funds, an investor can choose long-term plans with low-cost index funds or exchange-traded funds (ETFs). These can aid in providing substantial returns over an extended period.
Rajiv is an independent editorial consultant for the last decade. Prior to this, he worked as a full-time journalist associated with various prominent print media houses. In his spare time, he loves to paint on canvas.