Features of Medium Duration Mutual Funds
Medium Duration Mutual Funds possess several distinctive features that make them a noteworthy investment option. One key feature is their average maturity period, typically falling in the range of 3 to 4 years. This characteristic sets them apart, providing investors with a balanced mix of income generation and potential capital appreciation. Another notable aspect is their moderate risk-reward profile, striking a balance between short-term and long-term funds. This characteristic makes them suitable for investors seeking stability without entirely compromising on potential returns.
1. Average Maturity: These funds have a maturity period typically ranging from 3 to 4 years. In terms of risk and return potential they offer a profile that strikes a balance between short term and long term investment options.
2. Risk and Return: They offer a moderate risk-reward profile, striking a balance between short-term and long-term funds.
3. Liquidity: Medium duration funds are relatively more liquid compared to long-term funds, allowing investors to access their funds relatively quickly.
4. Diversification: They invest in a diversified portfolio of debt securities, spreading risk.
5. Tax Efficiency: Capital gains from debt mutual funds held for more than three years are taxed at a lower rate, making them tax-efficient options for long-term investors.
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