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Medium risk funds

  • Rudri Rawell
  • Jan 12 2022
  • 9 minutes
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Mutual fund investments have varying degrees of risk depending on the portfolio composition and fund objective. While investing in mutual funds, investors are often not aware of the risk they are taking. To protect the interest of investors, the Association of Mutual Funds in India (AMFI) has categorised risk exposure of mutual funds as high, moderately high, moderate, moderately low, and low.

Every individual has a different risk appetite and therefore may choose low-risk, medium-risk, or high-risk mutual funds, fund houses must compulsorily specify the level of risk exposure an investor has while investing in a particular fund.

Here, we will discuss medium-risk mutual funds in detail and highlight some of the top-performing medium-risk fund recommendations in India.

What is medium risk mutual fund?

Large-cap funds and funds that adopt aggressive-hybrid strategies fall under the medium-risk mutual fund’s bucket. This is because both these forms of mutual funds provide a moderate level of risk exposure to investors. Medium risk mutual funds are often preferred by investors since these are considered safe investments for short to medium-term time horizons, generally ranging between one to three years. 

Features of Medium Risk Mutual Funds

Some of the key features offered by medium risk mutual funds are:

  1. Medium risk mutual funds do not expose investors to excessive risks but aim to generate reasonable returns.
  2. The main objective of most medium risk mutual funds is to generate stable returns by investing in moderate risk instruments.
  3. These are ideal for investors looking for wealth creation over a 3-5 year time span.
  4. Ideal for portfolio diversification, especially for investors who are looking to balance out the overall portfolio risk.
  5. These funds generally invest in a mix of equity and debt instruments to generate sustainable risk-adjusted returns.

Who should invest in Medium Risk Mutual Funds?

Medium risk mutual funds are ideal for investors who are risk-conscious and are aiming to fetch risk-free returns or returns through minimal risk. These can help investors in creating a stable portfolio with an investment time horizon of 3+ years. 

Medium risk mutual funds provide investors an opportunity to gain exposure to both debt and equity instruments. While debt instruments can offer fixed returns, equity investments can fetch the benefit of generating higher returns during market upswings. 

Top performing Medium Risk Funds to invest in 2021

Some of the top performing medium risk mutual funds to invest in 2021 are:

Large-Cap Funds

Large cap funds are mutual funds which primarily invest in stocks of companies which have large market capitalization. Large cap companies are those which are well-established in the business segment and have a long positive track record. These companies have good corporate-governance and wealth-generation is often a slow and steady process. ​ 

  1. ICICI Prudential Bluechip
About the fund

ICICI Prudential Blue chip Fund is an open-ended large-cap equity fund which offers growth and stability to investor’s portfolios. It focuses investments in blue chip stocks which are diversified across various sectors.

Inception DateNovember 24, 2009
Benchmark NameNifty 50
Fund ManagerJitendra Arora
ObjectiveTo provide long-term capital appreciation through an equity portfolio that is mainly invested in large-cap stocks.
Historical Returns of the Fund (annualised)
1-Year2-Year3-Year5-Year10-Year
26.59%20.08%11.68%16.74%13.43%
  1. Axis Blue Chip Fund
About the Fund

Axis Bluechip Fund is an open-ended large-cap equity scheme designed for investors who aim for capital appreciation in the long run. It offers portfolio diversification with a combination of equity and equity-related instruments, predominantly focused on large-cap firms.

Inception DateJanuary 1, 2013
Benchmark NameNifty 50 Total Return
Fund ManagerShreyash Devalkar
ObjectiveLong-term capital appreciation through portfolio diversification comprising equity and related securities of large-cap firms.
Historical Returns of the Fund (annualised)
1-Year2-Year3-Year5-Year10-Year
20.51%22.59%17.33%18.49%14.37%
  1. UTI Master Share
About the fund

UTI Master Share fund invests in large market capitalisation companies and follows Growth at Reasonable Price (GARP) investment style. This well-diversified portfolio avoids sector and stock concentration. It has had a positive track record in dividend distribution since its inception.

Inception DateOctober 15, 1986
Benchmark NameS&P BSE 100
Fund ManagerSwati Kulkarni
ObjectiveTo achieve long term capital appreciation through investments predominantly in equity and equity related securities of large cap companies.
Historical Returns of the Fund (annualised)
1-Year2-Year3-Year5-Year10-Year
19.39%16.75%9.85%13.46%10.78%
  1. Mirae Asset Large Cap
About the fund

This is an open-ended equity fund which predominantly invests across large-cap stocks. It follows a sector and theme agnostic stock selection strategy. It focuses on investment across sector leaders who have a strong competitive advantage. It is suited to investors looking for an investment horizon of at least 3-4 years. 

Inception DateApril 4th, 2008
Benchmark NameNifty 100 (TRI)
Fund ManagerGaurav Misra,Harshad Borawake
ObjectiveTo achieve long term capital appreciation through investments predominantly in equity and equity related securities of large cap companies.
Historical Returns of the Fund (annualised)
1-Year2-Year3-Year5-Year10-Year
25.89%20.28%12.93%18.81%15.66%
  1. Canara Robeco Blue Chip Equity Fund  
About the fund

This is an open-ended equity fund which predominantly invests across large-cap stocks. It follows a sector and theme agnostic stock selection strategy. It focuses on investment across sector leaders who have a strong competitive advantage. It is suited to investors looking for an investment horizon of at least 3-4 years. 

Inception DateApril 4th, 2008
Benchmark NameNifty 100 (TRI)
Fund ManagerShridatta BhandwaldarSanjay Bembalkar
ObjectiveTo generate capital appreciation by predominantly investing in large cap companies. 
Historical Returns of the Fund (annualised)
1-Year2-Year3-Year5-Year10-Year
28.43%26.11%17.20%18.94%13.84%

Aggressive-Hybrid Funds

Aggressive hybrid funds are equity-oriented mutual fund schemes that aim to generate wealth and regular income for investors with an investment time horizon of 1-3 years. These funds invest in both debt and equity instruments in proportions as per the scheme’s investment objective. The usual allocation of investment in these schemes is a minimum 20% towards debt instruments and 60-80% in equity and equity-linked instruments.

  1. Canara Robeco Equity Hybrid Fund
About the Fund

The scheme’s objective is to maintain a balanced portfolio to provide high annual returns and capital appreciation to investors. The fund invests 73.65% in Indian stocks of which 47.18% is invested in large-cap stocks. 14.2% is allocated to mid-cap stocks and 2.68% in small-cap stocks. The fund also invests 20.85% in Debt instruments of which 9.97% is in Government securities, 10.88% is invested in very low-risk securities.

Inception DateJanuary 1, 2013
Benchmark NameCRISIL Hybrid 35+65 Aggressive Total Return Index
Fund ManagerShridatta BhandwaldarAvnish JainCheenu Gupta
Expense Ratio0.78%

Historical Returns of the Fund (annualised)

1-Year2-Year3-Year5-YearSince Inception
49.06%19.45%14.88%15.67%15.08%
  1. Mirae Asset Hybrid Equity Fund
About the Fund

The fund aims to generate capital appreciation combined with regular income from a portfolio mix of equity & equity related instruments and debt and money market instruments. The fund invests 74.62% in Indian stocks of which 47.29% is in large-cap stocks, 12.91% is in mid-cap stocks and 4.96% in small-cap stocks. 12.5% of funds are invested in Debt of which 6.56% is in Government securities, 5.94% in funds that invest in very low-risk securities.

Inception DateJuly 29, 2015
Benchmark NameCRISIL Hybrid 35+65 Aggressive Total Return Index
Fund ManagerHarshad Borawake,Mahendra Kumar Jajoo, Vrijesh Kasera
Expense Ratio0.45%

Historical Returns of the Fund (annualised)

1-Year2-Year3-Year5-YearSince Inception
55.04%17.64%14.90%16.14%14.00%
  1. Principal Hybrid Equity Fund
About the Fund

The scheme aims to achieve long-term capital appreciation and generate current income through a balanced portfolio of equity and debt securities. The fund invests 76.28% in Indian stocks of which 52.39% is in large-cap stocks, 11.65% is in mid-cap stocks and 1.47% in small-cap stocks. Remaining 19.91% investment is in Debt instruments of which 10.07% in Government securities and 9.84% is allocated to very low risk securities.

Inception DateJanuary 2, 2013
Benchmark NameCRISIL Hybrid 35+65 Aggressive Total Return Index
Fund ManagerRavi Gopalakrishnan, Bekxy Kuriakose
Expense Ratio1.02%

Historical Returns of the Fund (annualised)

1-Year2-Year3-Year5-YearSince Inception
54.31%14.56%10.14%15.22%14.21%
  1. IDFC Hybrid Equity Fund
About the Fund

The scheme aims to generate long-term capital appreciation through investments in equity and equity related instruments. The fund also invests in debt securities and money market instruments with the aim of generating current income for investors. The fund invests 78.29% in Indian stocks of which 44.24% is in large-cap stocks, 11.98% is in mid-cap stocks and 10.14% in small-cap stocks. The remaining 17.81% is invested in Debt of which 7.3% in Government securities and 10.51% in funds that invest in very low-risk securities.

Inception DateDecember 30, 2016
Benchmark NameS&P BSE 200 Total Return Index
Fund ManagerAnoop Bhaskar Anurag Mittal
Expense Ratio1.20%

Historical Returns of the Fund (annualised)

1-Year2-Year3-YearSince Inception
60.24%16.26%10.31%11.00%
  1. ICICI Prudential Equity & Debt Fund
About the Fund

The fund is designed to target long-term capital appreciation and current income through investments in a portfolio mix of equities and related securities as well as fixed income and money market securities. The fund invests in equities in the range of 60-80% with a minimum of 51% and the debt allocation ranges between 40-49% with a minimum of 20%.

Inception DateJanuary 01, 2013
Benchmark NameCRISIL Hybrid 35+65 Aggressive Total Return Index
Fund ManagerManish Banthia,Nikhil Kabra,Sankaran Naren,Mittul Kalawadia, Sri Sharma
Expense Ratio1.34%

Historical Returns of the Fund (annualised)

1-Year2-Year3-Year5-YearSince Inception
60.58%18.11%14.02%15.67%16.14%

Conclusion

Medium risk mutual funds offer a balance between equity and debt exposure along with maintaining reasonable risk levels. These are ideal investment options for investors seeking to diversify their portfolio and maintain an overall risk balance.

FAQs on Medium Risk funds

  1. What are medium risk mutual funds?
    Medium risk mutual funds invest in a combination of equity and debt instruments to maintain a moderate risk level with an objective to generate steady returns over 1-3 year investment horizons. Generally, large-cap mutual funds and aggressive hybrid funds fall under the medium risk category.
  1. What does moderate risk mean in mutual funds?
    Moderate risk in mutual funds means a balance between the risk and return element of the portfolio. A risk balance is maintained by moderate risk mutual funds through investment in a combination of debt and equity instruments.
  1. How to invest in medium risk mutual funds?
    Investors can choose any medium risk mutual funds by using the Finity app on their smartphones. This app allows investors to choose funds as per their investment horizon and risk appetite. It is easy to download and has a seamless investment process, especially for new investors.
  1. Are all mutual funds moderate risk?
    Not all mutual funds are moderate risk and the risk profile of every mutual fund depends on its investment objective. Moderate risk mutual funds specifically comprise large-cap and aggressive hybrid funds that invest in a combination of equity and debt instruments.
  1. Which mutual fund is best for beginners?
    It is advisable for new investors to pick either low-risk or medium-risk mutual funds depending on their investment objective and portfolio requirements.
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