Mutual fund investment strategy: Amid the hawkish Reserve Bank of India (RBI) interest rate hike, mutual fund investors are busy guessing at its impact on their returns. According to tax and investment experts, such a rising rate regime can impact the performance of equity mutual funds in the short term, say 6 months to two years. However, for long-term mutual fund investors, this will not have much impact on their performance, as the markets would reduce their losses in the medium to long term. Experts have said that short-term investors, who have a time horizon of 6 months to two years, should invest in mutual funds, especially cash, money market and bond funds. They said these funds should generate 0.50 to 1% more than their current average annual return.