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Best Moderate Risk Mutual Funds

Mutual fund investments involve a degree of risk. To ensure that investors are aware of the risk they are taking, the Association of Mutual Funds in India (AMFI) has divided the risk exposure of any funds into high, moderately high, moderate, moderately low, and low. While risk is subjective and may differ from one person to another, it is mandatory for fund houses to specify the risk exposure of the mutual funds as per the regulations.

Moderate risk mutual funds are funds that invest in MIP funds, Arbitrage funds, and Hybrid debt-oriented funds. These fund schemes are considered to be safe investments for short to medium term investment horizon which is about one to three years. The best moderate risk mutual funds as the name suggests expose your capital to only moderate-level risks.

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Top 10 Moderate Risk Mutual Funds

Fund NameCategoryRisk1Y ReturnsRatingFund Size(in Cr)
Union Balanced Advantage FundHybridModerate28.2%5star1,324
DSP Government Securities FundDebtModerate6.2%5star432
SBI Magnum Constant Maturity FundDebtModerate5.4%5star801
Axis Gilt FundDebtModerate6.2%5star147
Kotak Dynamic Bond FundDebtModerate6.7%5star2,984
Nippon India Banking & PSU Debt FundDebtModerate6.2%5star6,785
ICICI Prudential Short Term FundDebtModerate6.7%5star20,850
Aditya Birla Sun Life Short Term FundDebtModerate6.5%5star8,514
Nippon India Short Term FundDebtModerate7.2%5star10,189
Axis Short Term FundDebtModerate5.9%5star12,183
View All Top 10 Moderate Risk Mutual Funds

Features of Moderate Risk Mutual Fund

These funds are ideal for investors who do not want to take excessive risks but at the same time also want to generate reasonable returns. Most instruments selected by the fund houses to take moderate risks are capable of generating stable returns without any huge risks. These funds are ideal for investors aiming at the creation of wealth in a period of over one to three years.

The best moderate risk funds in India also serve the purpose of diversifying the investment portfolio through a mix of debt and equity funds which does not expose the investor to higher risks and also results in reasonable risk-adjusted returns. These mutual funds tend to accomplish long-term financial goals with the preservation of capital.

Taxability

Moderate risk mutual funds are similar to debt funds in terms of tax liability. The applicable tax rate for earning from mutual funds depends on the holding period of the investment. If the funds were held for a period of less than three years, a short-term capital gain tax as per the investor’s income tax slab will be applicable. On the other hand, if the holding period is more than 36 months, long term capital gain (LTCG) of 20 per cent with indexation will be levied.

Who Are These Funds Suited For?

These mutual funds are designed basically for risk-conscious investors seeking risk-free returns or returns at minimal risk. These mutual funds serve as the perfect instrument for investors with a medium to long-term investment horizon. Investing in the best performing mutual funds for moderate risk can help investors create a stable portfolio.

Investors looking to diversify their portfolio can also invest in moderate risk mutual funds and reduce the exposure to equity-oriented mutual funds. Investors who are not prepared for devastating or huge losses can stick to moderate risk mutual funds. Even if these funds were to generate negative returns, the losses would be moderate.

Major Advantages

These funds may serve different purposes for different investors depending on their individual goals.

Additionally, majority if not all moderate risk mutual funds are debt-oriented schemes making them a comparatively safer option for the investor. This also means that in case of a default, it is comparatively easier to get the initial investment back. The best moderate risk mutual funds can generate returns that are in-line with the risk exposure.

These funds enable risk-averse investors to generate a reasonable return without taking any undue risks and earn a regular income. Investors can also earn dividend income by investing in these funds.

Let's have a closer look

Now let us jump and check about these top 10 mutual fund schemes.

Union Balanced Advantage Fund Direct Growth

Fund Performance: This fund has given 14.97% annualized returns in the last three years. In the last year, its returns were 28.23%. It has continually hit its benchmark in the Hybrid segment.

Why to invest: It is one of the most remarkable Hybrid mutual funds in India. This fund has constantly outperformed other similar funds, providing 28.23% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹1,000. Minimum SIP investment amount required for this scheme is ₹2,000.

Min Investment Amt₹1,000
AUM1,324Cr
1Y Returns28.2%

DSP Government Securities Direct Plan Growth

Fund Performance: This fund has given 11.82% annualized returns in the last three years. In the last year, its returns were 6.2%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 6.2% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹500. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹500
AUM432Cr
1Y Returns6.2%

SBI Magnum Constant Maturity Fund Direct Growth

Fund Performance: This fund has given 11.3% annualized returns in the last three years. In the last year, its returns were 5.41%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 5.41% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹500.

Min Investment Amt₹5,000
AUM801Cr
1Y Returns5.4%

Axis Gilt Fund Direct Plan Growth

Fund Performance: This fund has given 11.14% annualized returns in the last three years. In the last year, its returns were 6.16%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 6.16% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt₹5,000
AUM147Cr
1Y Returns6.2%

Kotak Dynamic Bond Fund Direct Growth

Fund Performance: This fund has given 10.55% annualized returns in the last three years. In the last year, its returns were 6.74%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 6.74% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt₹5,000
AUM2,984Cr
1Y Returns6.7%

Nippon India Banking & PSU Debt Fund Direct Growth

Fund Performance: This fund has given 9.8% annualized returns in the last three years. In the last year, its returns were 6.16%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 6.16% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹100.

Min Investment Amt₹5,000
AUM6,785Cr
1Y Returns6.2%

ICICI Prudential Short Term Fund Direct Plan Growth

Fund Performance: This fund has given 9.53% annualized returns in the last three years. In the last year, its returns were 6.69%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 6.69% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt₹5,000
AUM20,850Cr
1Y Returns6.7%

Aditya Birla Sun Life Short Term Direct Fund Growth

Fund Performance: This fund has given 9.46% annualized returns in the last three years. In the last year, its returns were 6.53%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 6.53% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹1,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt₹1,000
AUM8,514Cr
1Y Returns6.5%

Nippon India Short Term Fund Direct Growth

Fund Performance: This fund has given 9.3% annualized returns in the last three years. In the last year, its returns were 7.16%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 7.16% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹100. Minimum SIP investment amount required for this scheme is ₹100.

Min Investment Amt₹100
AUM10,189Cr
1Y Returns7.2%

Axis Short Term Direct Fund Growth

Fund Performance: This fund has given 9.2% annualized returns in the last three years. In the last year, its returns were 5.91%. It has continually hit its benchmark in the Debt segment.

Why to invest: It is one of the most remarkable Debt mutual funds in India. This fund has constantly outperformed other similar funds, providing 5.91% returns in the last one year. Minimum lump sum investment amount required to invest in this scheme is ₹5,000. Minimum SIP investment amount required for this scheme is ₹1,000.

Min Investment Amt₹5,000
AUM12,183Cr
1Y Returns5.9%

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