4-6 years is considered medium-term in savings and investment decisions and hence capital appreciation should be your objective here. Corporate bond funds and hybrid funds are best suited for capital appreciation as they are less volatile compared to equity funds which are ideal for wealth creation over long-term. Corporate bond funds invest in high quality bonds with 3-5 years average maturity, becoming less sensitive to interest rate changes. Hybrid funds invest predominantly in debt with some equity exposure thus providing a safer investment option with potential for capital appreciation.
While evaluating funds for medium-term investments, look beyond the recent 3-5 years returns for the fund’s long-term performance. See if it has been a consistent performer through all phases of a market cycle. Most funds will perform well during
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