There are many financial instruments aiming to benefit short-term investors. One of them is the Canara Robeco Liquid Fund, which may help you generate a good amount of profits in a short duration and expose you to a lower risk than other debt funds.
In this blog, we’ll discuss the main advantages of investing in Canara Robeco Liquid Funds for the short-term duration of 2024. Without any delay, let’s begin the article!
Understanding Liquid Funds
Liquid funds are typically a category of debt mutual funds that invest mainly in short-term market instruments, including commercial papers, certificates of deposit, etc. with a maturity period of up to 91 days.
These funds are mainly designed for short-term investors looking for high-quality and lower-risk investment options. Liquid funds allow you to have better returns than savings accounts and give you easy access to funds.
There are many other benefits of investing in these funds. In the next section, we’ve mentioned certain benefits of investing in the Canara Robeco Liquid Funds.
6 Advantages of Investing in Canara Robeco Liquid Funds
Here are the six best advantages of investing in Canara Robeco Liquid Funds for the short term.
1. High Liquidity
Canara Robeco Liquid Fund primarily offers higher liquidity, allowing investors to quickly and easily access the funds when needed, especially in an emergency.
Moreover, the redemptions from the liquid funds can be processed within only one working day, allowing you to conveniently withdraw the invested capital.
In this way, this fund allows you to freely invest for short-term goals and enables you to take out your money for any other need, maybe for another short-term investment.
2. No Lock-in Period
Another significant advantage of this fund is that it does not have a lock-in period. Unlike FDs (Fixed Deposits), mutual funds don’t tie you up for a specific duration and instead give you the freedom to withdraw money at any given time and invest it in other short-term options.
3. Diversification
Investing in Canara Robeco mutual funds allows investors to diversify their capital across a range of high-quality debt instruments. In this way, you don’t associate your investment risk with a single security and instead spread it, mitigating the overall risk factor. Hence, it is one of the stable investment options for short-term investors.
4. Potential Competitive Returns
Compared to traditional savings accounts, these liquid funds serve better returns. Therefore, it is better to keep your funds here instead of in a Savings account, as you’ll get substantial returns. Moreover, you can withdraw the money at any given time in just one day.
5. Low Risk
The Canara Robeco Liquid Funds are mainly directed towards short-term, high-quality debt instruments. They entail treasury bills, commercial papers, and certificates of deposits, which are generally less sensitive to interest rate changes and market fluctuations as compared to equity funds or long-term debt funds. Therefore, these funds are a safer investment option.
6. Minimal Transaction Cost
The best thing about this Robeco fund is its low expense ratio of 0.12%, which means the cost of managing it is comparatively lower. If you’ve held the investment for more than seven days, there will be minimal or no exit loads. This cost-effectiveness makes the liquid funds a prudent choice for short-term investment.
Conclusion
In summary, Canara Robeco Liquid Funds possess a number of benefits for short-term investors, allowing them to diversify their money in the financial market and giving them time to access the money. We hope this article helps you understand the advantages of investing in this fund and whether you should invest in it.
