How Should One Select the Top Performing Liquid Funds?
Being least risky among the debt fund category, liquid funds invest in the cash equities and money market securities. These securities have maturities up to 91 days or less. The funds under this category are the ideal substitute for a savings account, offer returns of 6-7 per cent per annum. As the name suggests, the funds are highly liquid, and you can also withdraw the amount within 24 hours of investments. There are many liquid funds available in the industry, but some of the top performing funds are provided in the article further, along with some of the important details of it below:
What Are Liquid Funds?
With no restriction of the lock-in period, the liquid funds are those who invest in the treasury bills, commercial papers, bank deposits, fixed income securities, and other debt securities with maturities of 90 days.
However, the liquid funds do not provide very high returns, the investors who have kept idle money should invest in these funds. You can also put the emergency amount in the liquid funds and redeem whenever required. The best thing about these funds is that they do not have an entry or exit load.
On What Parameters the Top Performing Liquid Funds Are Selected?
Before selecting any fund, the funds are getting analysed comprehensively. Various quantitative and qualitative parameters are there on which the funds get selected. These parameters are:
The top-performing liquid funds that an investor should consider for investment in the year 2018, which have been selected on the above-listed parameters are provided below:
Before investing in the above-listed funds, the investors should know whether the funds are providing the expected returns and you are reaching your decided objectives or not. However, no funds guarantee that they will provide good returns, but mostly, the returns of liquid mutual funds are positive at the time of redemption.