Since 4-6 years are considered medium-term in terms of saving and investing, capital growth should be your goal in this situation. Because they are less volatile than equity funds, which are suitable for long-term asset accumulation, corporate bond funds and hybrid funds are best suited for capital growth. Corporate bond funds invest in high-quality bonds with an average duration of 3-5 years, which makes them less vulnerable to changes in interest rates. Hybrid funds offer a safer investment choice with the possibility for capital growth by investing mostly in debt with some equity exposure.
When assessing funds for medium-term investments, consider the fund's long-term performance in addition to the returns from the previous three to five years. Check to see if it has consistently performed across a market cycle. A fund that delivers a greater return during a market downturn will show consistent returns over time, but most funds will perform well during a secular bull run, or when markets are heading upwards. You would gain from investing in the steady performers since you wish to hold your investments for three to five years, and if the market happens to be bearish during this period. Choose a fund from a reputable fund firm with a strong track record, or ask an investing professional for assistance.