Certain conservative funds invest only in fixed income securities, while some variants invest in both categories – fixed income and equities.
A conservative fund option usually has investments in debt instruments and / or equities that fit a certain specification like a steady track record of dividends or large market capitalizations. Conservative funds are launched by unit-linked insurance plans / ULIPs, mutual funds and other investment firms.
Conservative funds can fall in one of two categories. They invest in:
a. fixed income securities like bonds, government securities, money market instruments
b. stocks / shares of companies that are blue chips with consistent track of dividends, large market capitalizations or such criteria
c. smaller companies or small caps
How Does a Conservative Fund Work?
The investment strategy is guided by the principle of capital preservation with enough risk-taking investments to generate adequate growth without endangering the overall fund.
While a conservative investment strategy can have many definitions, it primarily aims at beating inflation with additional growth. In other words, it looks at providing positive inflation-adjusted returns.
The investment guidelines vary across ULIPs / mutual funds and investors are informed of this through product literature / company websites.
Who Is It Ideal For?
For an investor with low risk appetite and long-term goals like saving for child’s education, retirement planning or child’s marriage, conservative funds are an option either on a standalone basis or in combination with other conservative investment options.
- Compare Life Insurance Policies
- Best Long Term Investment Options
- Best Short Term Investment Options
- HDFC Life Opportunity Fund
- HDFC SL Crest Opportunity Fund
Related Insurance Definitions:
Products Offered by HDFC Life:
Income Tax Slab 2021-22
February 17, 2020
Income Tax Return Guide - Details You Should Know
November 07, 2016
Best Tax Saving Investment Options in 2022 (FY 2022-2023)
November 08, 2016
Subscribe to get the latest articles directly in your inbox
14 Best Investment Options In India
October 30, 2018
Short Term Investments: Top 11 Short Term Investment Options For 2022
November 08, 2016
Insurance vs Investment - Did You Get the Right Financial Plan?
November 05, 2018
Popular & Recent Articles
How to Plan for Retirement as Per your Age
"The thumb rule for retirement planning is - the earlier you start, the more you save. However, with age, your priorities change too. So, you need to factor in the cost of living in the present vis- a -vis future."
HDFC Life Insurance Company Limited. CIN: L65110MH2000PLC128245, IRDAI Reg. No. 101.
Registered Office: Lodha Excelus, 13th Floor, Apollo Mills Compound, N.M. Joshi Marg, Mahalaxmi, Mumbai 400 011. Email: [email protected], Tel No: 1800-266-9777 (10 am to 7 pm). The name/letters “HDFC” in the name/logo of the company belongs to Housing Development Finance Corporation Limited (“HDFC Limited”) and is used by HDFC Life under an agreement entered into with HDFC Limited.
For more details on risk factors, associated terms and conditions and exclusions please read sales brochure carefully before concluding a sale.
|BEWARE OF SPURIOUS PHONE CALLS AND FICTIOUS/FRAUDULENT OFFERS