Need Expert Advice?Our Gurus Can Help

Ramalingam Kalirajan |11136 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Apr 08, 2026

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more

Asked by Anonymous - Mar 08, 2026Hindi

Hi sir can you please suggest me any good mutual funds to invest now for good % of returns for horizon of 3 yrs. Regards

Ans: It is very good that you are planning your investment with a clear time horizon of 3 years. Having a defined time period helps in choosing the correct mutual fund categories and managing risk properly. For a 3-year goal, the focus should be on stability along with reasonable growth.

» Understanding the right approach for a 3-year horizon

– A 3-year period is considered a short to medium-term investment horizon
– Pure equity mutual funds alone may carry higher volatility in this time frame
– A mix of equity-oriented hybrid funds and selective diversified equity funds can improve balance
– The goal should be steady growth instead of chasing very high returns

Expecting very high percentage returns in 3 years is not practical. But disciplined selection can help create meaningful growth with controlled risk.

» Suitable mutual fund categories to consider now

You may consider investing across the following categories:

– Balanced Advantage Funds
These funds adjust equity exposure based on market conditions. They help reduce downside risk and improve stability.

– Aggressive Hybrid Funds
They invest mostly in equity and partly in debt. Suitable for moderate growth over 3 years.

– Large & Mid Cap Funds (actively managed)
These provide a mix of stability from large companies and growth from mid-sized companies.

– Multi Asset Allocation Funds
They invest across equity, debt and sometimes gold. This improves diversification and reduces volatility risk.

» Suggested allocation strategy for better balance

A simple allocation structure can be:

– 40% in Balanced Advantage Funds
– 30% in Aggressive Hybrid Funds
– 20% in Large & Mid Cap Funds
– 10% in Multi Asset Allocation Funds

This structure helps manage risk while still aiming for growth.

» Expected return guidance for 3 years

– Returns are market-linked and not guaranteed
– A reasonable expectation may be moderate growth rather than aggressive returns
– Trying to chase very high returns in short duration may increase risk unnecessarily

Consistency and discipline matter more than selecting aggressive options.

» Investment method matters for better results

– Prefer SIP if investing monthly
– Prefer staggered investment if investing lump sum
– Review portfolio once every 6–12 months
– Avoid frequent switching between funds

Regular monitoring improves outcome quality.

» Tax awareness before investing

If equity-oriented mutual funds are sold within 3 years:

– Short-term capital gains taxed at 20%

If held beyond 1 year but within your 3-year window planning, taxation should still be considered while exiting.

Planning exit timing carefully can improve net returns.

» Finally

For a 3-year horizon, the correct strategy is balance between safety and growth. A combination of hybrid and diversified actively managed equity funds is more suitable than aggressive equity-only exposure. Staying disciplined with allocation and review will improve the probability of achieving a good outcome.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

https://www.linkedin.com/in/ramalingamcfp/

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.