Which is the best mutual fund according to your risk appetite

An investor should also consider several other things before investing.

you must check what kind of investor you are and find out the risk that you can tolerate


People prefer investing in mutual funds as they know that it is safer than choosing stocks. It sounds easy for investors to choose a mutual fund and keep investing in it to generate good returns. However, selecting the right scheme is not an easy one. You cannot choose a mutual fund product mainly based on its past performance. An investor should also consider several other things before investing, such as downside risk, fees, consistency of its performance etc. Read this post to know how to choose mutual fund schemes to invest based on your risk appetite.

Risk and returns in mutual funds

Mutual funds are a suitable investment option for people to plan their financial goals. This investment instrument is sufficient to cater to a large spectrum of risk appetites. It is highly important to consider the risk factor while investing in mutual funds because returns from this investment also related to its risk factors. Choose funds with high risk appetite if capital appreciation is your investment objective. At the same time, you can consider taking risks if you look for a long investment horizon.

Even if you look for long investment horizon with capital appreciation, but not high appetite for volatility, then also you can find suitable schemes in mutual funds. Investors have different risk tolerance even for two different investment objectives. But if you look at its investment objective and horizon, both have goals similar in nature.

Choose the right fund based on your risk appetite

An investor can invest in mutual funds to earn better returns for short-term than fixed deposits. He can also plan his long-term investment goals with mutual funds like his children’s education, their marriage, purchasing a house or his retirement. The risk tolerance can be varied from investor to investor. Some investors have a high risk appetite for planning his retirement investment but he has a low risk tolerance when it comes to investment for his children’s higher education. So, the investment goals can be different for each individual.

Consider the following things before you investing in mutual funds:

  • Your investment objective (income generation or capital appreciation)
  • Time horizon of your goal (short-term, medium-term or long-term)
  • Your risk tolerance (risk that you are ready to take with investments)
  • The liquidity requires over the investment period

What kind of investor you are.

If you prefer to invest in equity mutual fund, you must check what kind of investor you are and find out the risk that you can tolerate. Large-cap mutual fund schemes or equity-oriented balanced schemes are suitable for you if you are a conservative investor. Choose only large-cap or multi-cap mutual fund schemes to investing in if you are a moderate investor. Mid-cap or small-cap schemes are better suited for aggressive investors. You can also consider including sectoral schemes in your investment portfolio as a low-risk investor if you have a good understanding about different sectors. You can consider your mutual fund advisor to choose the right schemes based on your investment goals and risk appetite.


Do you think you have chosen the right mutual fund scheme to invest based on your risk appetite? Mutual fund offers different schemes and picking any scheme to invest your money might not help you to reap good returns. You cannot pick any mutual fund plan randomly and invest in it without knowing your risk profile and investment horizon. Identify your goals and know your risk profile before investing in a mutual fund scheme. Some investors combine different mutual fund schemes to make a perfect portfolio for them. But they do not consider the composition of the portfolio in such cases. So, consider risk appetite and investment horizon before choosing the right schemes for your mutual fund investment.

That’s why Comparte Investment team asks do you have “Nivesh Ki Aadat”.

With this one can say “Mutual Fund Sahi hai”,  so let me do Nivesh / Enquire