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Exchange Traded Funds (ETFs) are a low-cost alternative to mutual funds to diversify portfolios. They hold a basket of stocks or other securities to track or replicate an index like Sensex, Nifty, etc. They are thus passively managed funds meant to minimise the tracking error of any index and not beat it like actively managed mutual funds.

Liquid funds are a class of funds used for short-term investments. The primary function of liquid debt funds is to provide liquidity and safety to investors. Liquid funds typically invest in money market instruments, such as certificates of deposit, treasury bills, commercial papers etc. Liquid funds generally are considered to be low-risk investments.

The key to building a stable debt fund portfolio lies in taking into account several factors. These include the reason for having debt instruments in a portfolio, understanding the features of the different types of debt funds, layering while assembling a portfolio, etc.

SIP calculator allows investors to measure the estimated returns on a mutual fund investment accurately. It also helps an investor keep track of their investment amounts and gives accurate projections on the optimal amount to invest at any given time.

Mutual funds are a formidable weapon for financial planning. They are a vehicle you can use to manage your investments in multiple asset classes. In short, you can use mutual funds to strike a balance in your portfolio.

Looking to invest in mutual funds? Well, first, you need to know the different types of mutual funds and the available schemes. Click here to read more on the types of mutual funds that are available.