Aren mutual funds risky investments?
Mutual funds offer a variety of schemes ranging from relatively safe debt funds like Magnum Income Fund and gilt funds like Magnum Guilt Fund to very risky sectoral funds like Magnum Sector Funds Umbrella. Investors can choose schemes best suited to their risk appetite. Debt funds and gilt funds, which invest only in fixed-income instruments, are relatively safe and offer returns equivalent to returns on pure Debt instruments, when held for atleast a year. Sectoral funds, such as IT Funds, Pharma Funds, etc can offer very high returns when the stock markets are bullish, but these are high risk products and can also result in a loss on capital when the markets are bearish.
