Investment portfolio to meet varied goals need to be a mix of debt, equity , gold, cash, property. And the proportion of each also is determined basis your age, how far is the goal you have figured out is, your risk profile. But necessarily, the relevance of each cannot be ignored. While in doing so, you being a highly risk-avert individual can bet for bank FDs or such other instruments, it is highly likely that your achieving of the financial goal might be rendered pretty tough.

This is because despite the air of high risk surrounding even in case of debt funds who in last few months have seen many companies' defaulting, experts still suggest them to have them in your kitty. And though the onus of risk has to be borne by you, here you'll be compensated with higher return, liquidity and taxation benefit indeed.

So, for your different short term and long term goals, you can meet your requirement just by scouting out from amongst these 4 different debt fund categories:

1. Liquid funds for high liquidity: To combat the recent concerns related to credit and liquidity risk, the market regulator SEBI has proposed a host of changes in liquid funds' valuation and investment norms. They invest in funds with low volatility in returns and are as per norms debt instruments that mature within 91 days.

So, you can in a situation where you have received a windfall and not able to make out where to invest it wisely, can take its shelter. Also, a contingency fund for a six-months to one-years time is well built with the help of liquid funds.

Also, by investing in this debt fund category you are also able to avoid interest rate risks as these bet on funds or instruments with a shorter maturity time. So, they stand out from other debt fund categories and manage to provide return i.e. at par with interest rates prevailing in the economy.

Further another advantage is its low cost in terms of expense ratio of 0.1-0.2% a year in case of some of them.

2. Short-duration funds for intermittent goals : For such goals that have a time horizon of some 3-5 years, short duration funds can be opted that provide you with a benefit of compounding without exposing you to a high degree of risk. And these further provide you a reasonable balance between risks and returns and scores better in term of tax-efficiency in the longer run.

They are also amongst the debt category of funds that do not show high volatility.

3. Equity-savings funds for a goal i.e. 5 years hence: These are a hybrid funds category i.e. efficient when it comes to taxation. Their returns are similar to debt fund but taxation as per a equity fund type. So, taxed at 10% if the gains are over Rs. 1 lakh in a year and the redemption in the product is made after a period of one year.

They are a safe bet if the financial goal is 5 years away.

4. Conservative hybrid funds for capital protection and inflation-beating returns: These serve risk-averse individuals providing high capital safety as well as inflation beating return. Also, these are referred as savings plan and invest 70-75% of their holding in debt and remaining in equity instrument. They are capable of beating markets even in uncertain times.

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