Best Low Risk Mutual Funds For SIP In India English

Best Low Risk Mutual Funds For SIP In India

The below table shows the Best Low Risk Mutual Funds For SIP In India based on AUM, NAV, and minimum SIP.

NameAUM (Cr)NAV (Rs)Minimum SIP (Rs)
Kotak Equity Arbitrage Fund39099.3436.63100
Invesco India Arbitrage Fund14611.2731.56100
Nippon India Arbitrage Fund13853.8526.311500
Aditya Birla SL Arbitrage Fund10668.4126.19100
Axis Overnight Fund10498.821271.77100
Tata Arbitrage Fund10151.8113.82150
Edelweiss Arbitrage Fund9167.2119.04100
Axis Arbitrage Fund3966.2918.6100
Mirae Asset Overnight Fund1372.021232.96100
Bank of India Overnight Fund63.651219.17100

Content:

What is a Mutual Fund SIP?

A Mutual Fund Systematic Investment Plan (SIP) is a method of investing a fixed sum regularly in a mutual fund. It is designed to build wealth over time by averaging the purchase cost and harnessing the power of compounding.

Investing through an SIP allows participants to buy more units when prices are low and fewer when prices are high, which can lead to optimal investment growth. This strategy is known as rupee cost averaging and helps mitigate the risk of market timing.

Additionally, SIPs are highly flexible, accommodating adjustments in the investment amount or pausing the investment temporarily. It’s suitable for investors who may not have a large sum to invest initially, enabling them to contribute small amounts monthly or quarterly.

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List Of 10 Best Low Risk Mutual Funds For SIP

The table below shows the List Of 10 Best Low Risk Mutual Funds For SIP based on the lowest to highest expense ratio.

NameExpense Ratio (%)Minimum SIP (Rs)
Mirae Asset Overnight Fund0.04100
Axis Overnight Fund0.05100
Bank of India Overnight Fund0.09100
Tata Arbitrage Fund0.3150
Axis Arbitrage Fund0.3100
Aditya Birla SL Arbitrage Fund0.35100
Edelweiss Arbitrage Fund0.35100
Nippon India Arbitrage Fund0.371500
Invesco India Arbitrage Fund0.4100
Kotak Equity Arbitrage Fund0.43100

Best Low Risk Mutual Funds For SIP In India

The table below shows the Best Low Risk Mutual Funds For SIP In India based on the Highest 3Y CAGR. 

NameCAGR 3Y (Cr)Minimum SIP (Rs)
Invesco India Arbitrage Fund6.51100
Kotak Equity Arbitrage Fund6.4100
Edelweiss Arbitrage Fund6.38100
Nippon India Arbitrage Fund6.261500
Tata Arbitrage Fund6.24150
Axis Arbitrage Fund6.24100
Aditya Birla SL Arbitrage Fund6.18100
Bank of India Overnight Fund5.34100
Mirae Asset Overnight Fund5.29100
Axis Overnight Fund5.27100

Top 10 Low Risk Mutual Funds For SIP

The table below shows the Top 10 Low Risk Mutual Funds For SIP based on exit load, i.e., the fee that the AMC charges investors when they exit or redeem their fund units.

NameAMCExit Load (%)
Bank of India Overnight FundBank of India Investment Managers Private Limited0
Mirae Asset Overnight FundMirae Asset Investment Managers (India) Private Limited0
Axis Overnight FundAxis Asset Management Company Ltd.0
Edelweiss Arbitrage FundEdelweiss Asset Management Limited0.1
Kotak Equity Arbitrage FundKotak Mahindra Asset Management Company Limited0.25
Nippon India Arbitrage FundNippon Life India Asset Management Limited0.25
Tata Arbitrage FundTata Asset Management Private Limited0.25
Axis Arbitrage FundAxis Asset Management Company Ltd.0.25
Aditya Birla SL Arbitrage FundAditya Birla Sun Life AMC Limited0.25
Invesco India Arbitrage FundInvesco Asset Management Company Pvt Ltd.0.5

List Of 10 Best Low Risk Mutual Funds For SIP

The table below shows a List Of the 10 Best Low Risk Mutual Funds For SIP based on Absolute 1 Year Return and AMC.

NameAMCAbsolute Returns – 1Y (%)
Kotak Equity Arbitrage FundKotak Mahindra Asset Management Company Limited8.67
Edelweiss Arbitrage FundEdelweiss Asset Management Limited8.54
Invesco India Arbitrage FundInvesco Asset Management Company Pvt Ltd.8.48
Nippon India Arbitrage FundNippon Life India Asset Management Limited8.43
Tata Arbitrage FundTata Asset Management Private Limited8.42
Aditya Birla SL Arbitrage FundAditya Birla Sun Life AMC Limited8.41
Axis Arbitrage FundAxis Asset Management Company Ltd.8.33
Bank of India Overnight FundBank of India Investment Managers Private Limited6.88
Mirae Asset Overnight FundMirae Asset Investment Managers (India) Private Limited6.83
Axis Overnight FundAxis Asset Management Company Ltd.6.83

Who Should Invest In Best Low Risk Mutual Funds For SIP In India?

Investors seeking a stable and low-risk approach to wealth accumulation should consider the best low-risk mutual funds for SIP in India. These funds are ideal for conservative investors, including retirees or those with a low-risk appetite who prefer steady income over high returns.

Low-risk mutual funds for SIP are especially suitable for individuals who are new to investing or are nearing retirement. The conservative nature of these funds helps protect the principal amount while providing a stable, albeit lower, return compared to more aggressive investments.

Additionally, these funds are a good choice for those who wish to invest small amounts periodically without the pressure of lump-sum investments. SIPs in low-risk funds allow investors to benefit from the compounding effect over a long period, aiding in the gradual build-up of retirement savings or other financial goals.

How To Invest in the Best Low Risk Mutual Funds For SIP In India?

To invest in the best low-risk mutual funds for SIP in India, start by identifying funds with a strong track record of stability and consistent performance. Choose funds that focus on government securities, high-grade bonds, and other low-risk assets. Consult a financial advisor to align these choices with your long-term financial goals.

Next, decide on the amount and frequency of your SIP investments. It’s crucial to invest an amount that fits comfortably within your budget while allowing you to benefit from the compounding effect over time. Most mutual fund platforms and banks offer easy online setups for SIPs.

Finally, regularly review and adjust your SIP investments as needed. Monitor the performance of the mutual funds and consider changes in your financial situation or goals. This proactive approach ensures your investments remain aligned with your objectives and adapt to any shifts in the market or personal circumstances.

Performance Metrics Of Low Risk Mutual Funds For SIP In India

Performance metrics of low-risk mutual funds for SIP in India focus on stability, return consistency and risk management. Key indicators include the fund’s Sharpe ratio, alpha, beta, and standard deviation, which help investors gauge the fund’s performance relative to its risk level.

The Sharpe ratio is particularly important as it measures the risk-adjusted return, providing a snapshot of how much extra return the investor is receiving for the extra volatility endured. A higher Sharpe ratio indicates a more attractive risk-adjusted return, making it a crucial metric for assessing low-risk funds.

Additionally, the beta of the fund shows its sensitivity to market movements, and a lower beta is typically preferred for low-risk mutual funds as it suggests less volatility. Standard deviation measures the fund’s return variability, with a lower standard deviation indicating less risk. These metrics collectively aid investors in making informed decisions when choosing the best low-risk mutual funds for SIPs in India.

Benefits of Investing in Low Risk Mutual Funds For SIP In India

The main benefits of investing in low-risk mutual funds for SIP in India include regular, stable returns with minimized risk exposure. This investment strategy is ideal for conservative investors or those prioritizing capital preservation over high returns, especially useful for long-term goals like retirement planning.

  • Steady Gains: Investing in low-risk mutual funds through SIPs offers stable returns, making it ideal for those who prefer a gradual but steady growth in their investments. This stability is especially appealing for long-term goals where avoiding major market dips is crucial.
  • Risk Control: Low-risk funds inherently carry less market volatility, which means your investments are less likely to see dramatic declines. This makes them an excellent option for conservative investors or those who cannot afford large financial setbacks.
  • Financial Discipline: SIPs enforce financial discipline by automating monthly or quarterly investments. This systematic approach not only simplifies the investment process but also helps in averaging the purchase cost over time, which can lead to potentially better returns during various market phases.

Challenges Of Investing In Low Risk Mutual Funds For SIP In India

The main challenges of investing in low-risk mutual funds for SIP in India include relatively lower returns compared to higher-risk investments and potential underperformance during market upswings. This conservative approach may not match inflation rates, possibly leading to diminished purchasing power over time.

  • Modest Gains: Low-risk mutual funds often generate lower returns compared to their high-risk counterparts. This can be a significant drawback during bull markets, where more aggressive investments typically see substantial growth.
  • Pacing with Inflation: These funds may struggle to keep up with inflation, potentially eroding the purchasing power of your savings over time. This is a critical consideration for long-term investments where maintaining the real value of money is essential.
  • Opportunity Cost: By choosing low-risk mutual funds, investors might miss out on higher returns available from investing in more volatile assets during favorable market conditions. This trade-off needs careful consideration, especially if you have a long investment horizon ahead.

Introduction to Best Low Risk Mutual Funds For SIP In India

Kotak Equity Arbitrage Fund

The Kotak Equity Arbitrage Fund Direct-Growth is an arbitrage mutual fund offered by Kotak Mahindra Mutual Fund. It has been available for over 11 years, since its inception on January 1, 2013.

The Kotak Equity Arbitrage Fund, categorized as an Arbitrage Fund, manages an Asset Under Management (AUM) of 39,099.34(Cr). It has a five-year Compound Annual Growth Rate (CAGR) of 8.67%. The fund carries an exit load of 8.67% and maintains an expense ratio of 0.43. It is classified under the SEBI risk category as Low. The asset allocation is detailed as follows: 19.67% is allocated to debt instruments, and 80.92% is allocated to other types of assets. There is no portion of the portfolio invested in equity. This setup emphasizes a significant investment in non-equity assets.

Invesco India Arbitrage Fund

The Invesco India Arbitrage Fund Direct-Growth, an arbitrage mutual fund offered by Invesco Mutual Fund, was launched on January 1, 2013. This fund has been operational for over 11 years and three months.

The Invesco India Arbitrage Fund, an Arbitrage Fund, oversees Assets Under Management (AUM) of 14,611.27(Cr). It has achieved a Compound Annual Growth Rate (CAGR) of 8.48% over the past five years. The fund has an exit load of 8.48% and an expense ratio of 0.4. It falls under the Low-risk category according to SEBI. The asset allocation is structured with 0% in equity, 17.99% in debt, and 82.57% in other asset types. This setup highlights a significant emphasis on other assets, with a smaller portion allocated to debt and none to equity.

Nippon India Arbitrage Fund

The Nippon India Arbitrage Fund Direct-Growth, an arbitrage mutual fund offering from Nippon India Mutual Fund, has been operational for 11 years and three months, having first been introduced on January 1, 2013.

The Nippon India Arbitrage Fund, part of the Arbitrage Fund category, has an Asset Under Management (AUM) of 13,853.85(Cr). It has posted a Compound Annual Growth Rate (CAGR) of 8.43% over five years. The fund features an exit load of 8.43% and an expense ratio of 0.37. According to SEBI, it is classified under the Low-risk category. The asset allocation is structured as follows: 72.53% is invested in equity, 4.23% in debt, and 23.24% in other asset classes. This distribution demonstrates a significant emphasis on equity, with a smaller proportion allocated to debt and other investments.

Aditya Birla SL Arbitrage Fund

The Aditya Birla Sun Life Arbitrage Fund Direct-Growth is an arbitrage mutual fund offered by Aditya Birla Sun Life Mutual Fund. Launched on January 1, 2013, this fund has been active for 11 years and three months.

The Aditya Birla SL Arbitrage Fund, which falls under the Arbitrage Fund category, manages Assets Under Management (AUM) totaling 10,668.41(Cr). It has achieved a Compound Annual Growth Rate (CAGR) of 8.41% over the past five years. The fund carries an exit load of 8.41% and an expense ratio of 0.35. It is rated as Low risk by SEBI. The fund allocates 64.3% of its investments to domestic equities, distributed as follows: 35.16% in Large Cap stocks, 9.42% The fund is structured with 64.3% of its investments in domestic equities, split among 35.16% in Large Cap stocks, 9.42% in Mid Cap stocks, and 7.44% in Small Cap stocks. Additionally, 17.47% of the fund’s assets are invested in debt, including 0.93% in Government securities and 14.72% in low-risk securities.

Axis Overnight Fund

The Axis Overnight Fund Direct-Growth is an overnight mutual fund offered by Axis Mutual Fund. Launched on March 7, 2019, this fund has been operational for over 5 years and a month.

The Axis Overnight Fund, categorized as an Overnight Fund, holds an Asset Under Management (AUM) of 10,498.82(Cr). It has registered a Compound Annual Growth Rate (CAGR) of 6.83% over five years. The fund features an exit load of 6.83% and a very low expense ratio of 0.05. It is classified under the Low-risk category according to SEBI. The asset allocation consists primarily of debt, which makes up 99.50% of the total. The remaining 0.50% is allocated to cash and other asset types. This distribution indicates a strong emphasis on debt investments with a minimal portion held in cash and equivalents.

Tata Arbitrage Fund

The Tata Arbitrage Fund Direct-Growth, an arbitrage mutual fund offered by Tata Mutual Fund, has been available since its inception on December 10, 2018. This fund has been operating for 5 years and 4 months.

The Tata Arbitrage Fund, part of the Arbitrage Fund category, manages an Asset Under Management (AUM) of 10,151.81(Cr). It has a five-year Compound Annual Growth Rate (CAGR) of 8.42%. The fund has an exit load of 8.42% and an expense ratio of 0.3. It is categorized as Low risk by SEBI. The asset allocation is structured with 27.51% in debt and 72.97% in other types of assets. There is no allocation towards equity in this configuration, focusing instead on debt instruments and other asset categories to form the portfolio’s composition.

Edelweiss Arbitrage Fund

The Edelweiss Arbitrage Fund Direct-Growth is an arbitrage mutual fund offered by Edelweiss Mutual Fund. Launched on June 12, 2014, this fund has been operational for approximately nine years and ten months.

The Edelweiss Arbitrage Fund, which is an Arbitrage Fund, has an Asset Under Management (AUM) of 9,167.21(Cr). It has achieved a Compound Annual Growth Rate (CAGR) of 8.54% over the last five years. The fund features an exit load of 8.54% and an expense ratio of 0.35. It is rated as Low risk by SEBI. The asset allocation is structured with 0% in equity, 25.14% in debt, and 75.42% in other asset types. This configuration indicates a focus on non-equity investments, allocating a significant portion to other assets while maintaining a quarter of the portfolio in debt securities.

Axis Arbitrage Fund

The Axis Arbitrage Fund Direct-Growth is an arbitrage mutual fund scheme offered by Axis Mutual Fund. This fund has been operational for nine years and nine months, having been launched on July 25, 2014.

The Axis Arbitrage Fund, listed under the Arbitrage Fund category, manages an Asset Under Management (AUM) of 3,966.29(Cr). It has posted a Compound Annual Growth Rate (CAGR) of 8.33% over the past five years. The fund has an exit load of 8.33% and maintains an expense ratio of 0.3. It is classified as Low risk according to SEBI. The asset allocation is divided as follows: 33.87% is allocated to debt, and 66.61% is allocated to other asset types. There is no portion of the allocation invested in equity. This configuration shows a predominant focus on debt and other asset categories.

Mirae Asset Overnight Fund

The Mirae Asset Overnight Fund Direct-Growth is an overnight mutual fund offered by Mirae Asset Mutual Fund. Launched on October 15, 2019, this fund has been operational for four years and six months.

The Mirae Asset Overnight Fund, categorized as an Overnight Fund, holds Assets Under Management (AUM) of 1,372.02(Cr). It has achieved a Compound Annual Growth Rate (CAGR) of 6.83% over five years. The fund carries an exit load of 6.83% and features an expense ratio of 0.04. It is rated as Low risk by SEBI. The asset allocation breakdown is as follows: there is no allocation towards equity, with 5.04% allocated to debt, and the remaining 94.96% allocated to other asset types.

Bank of India Overnight Fund

The Bank of India Overnight Fund Direct-Growth is an overnight mutual fund scheme offered by the Bank Of India Mutual Fund. This fund has been operational for four years and three months, having been launched on January 27, 2020.

The Bank of India Overnight Fund, which falls under the Overnight Fund category, has an Asset Under Management (AUM) of 63.65(Cr). It has recorded a five-year Compound Annual Growth Rate (CAGR) of 6.88%. The fund features an exit load of 6.88% and an expense ratio of 0.09. It is classified as Low risk according to SEBI.

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List Of 10 Best Low Risk Mutual Funds For SIP – FAQs

1. Which Are The Best Low Risk Mutual Funds For SIP In India?

The Best Low Risk Mutual Funds For SIP #1: Kotak Equity Arbitrage Fund
The Best Low Risk Mutual Funds For SIP #2: Invesco India Arbitrage Fund
The Best Low Risk Mutual Funds For SIP #3: Nippon India Arbitrage Fund
The Best Low Risk Mutual Funds For SIP #4: Aditya Birla SL Arbitrage Fund
The Best Low Risk Mutual Funds For SIP #5: Axis Overnight Fund

These funds are listed based on the Highest AUM.

2. What Are The Top Low Risk Mutual Funds For SIP In India?

Some of the top low-risk mutual funds for SIP in India include Kotak Equity Arbitrage Fund, Invesco India Arbitrage Fund, Nippon India Arbitrage Fund, Aditya Birla SL Arbitrage Fund, and Axis Overnight Fund. These funds focus on low-risk strategies like arbitrage and overnight investments, making them suitable for SIPs.

3. Can I Invest In Low Risk Mutual Funds For SIP In India?

Yes, you can invest in low-risk mutual funds for SIP in India. These funds are suitable for conservative investors looking for steady returns and capital preservation. SIPs provide a convenient and disciplined approach to investing small amounts regularly, making them accessible to a wide range of investors.

4. Is It Good To Invest In Low Risk Mutual Funds For SIP In India?

Yes, investing in low-risk mutual funds for SIP in India can be beneficial for investors prioritizing capital preservation and steady returns. These funds offer stability and lower volatility, making them suitable for conservative investors or those with a low-risk tolerance, particularly for long-term financial goals like retirement planning.

5. How To Invest In Low Risk Mutual Funds For SIP In India?

To invest in low-risk mutual funds for SIP in India, start by researching funds with stable track records and consistent performance. Choose funds that focus on low-risk assets like high-quality bonds or arbitrage opportunities. Set up a SIP through your preferred mutual fund platform or financial institution, specifying your investment amount and frequency.

Disclaimer: The above article is written for educational purposes, and the companies’ data mentioned in the article may change with respect to time The securities quoted are exemplary and are not recommendatory.

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