“If you’re looking at saving for a rainy day”, “If you hope to have a steady stream of income when you retire” then, “Monthly Income Plan might be just the ticket”!
An Introduction: In current market scenario, when Fixed Income alternatives are reducing because of limited options available in terms of low returns and unfavorable taxations, Monthly Income Plan (MIP) comes out be the suitable solution for the clients with conservative to moderate risk appetite. MIPs are the hybrid investment avenues that invest a small portion of their portfolio (around 15 %-25 %) in equities and the remaining in debt and money market instruments (i.e. bonds, certificates etc). MIPs can provide regular inflows to investor, but the periodicity depends upon the option you choose. These are generally monthly, quarterly, half-yearly and annual options. A growth option is also available, where you do not receive regular dividends, but gains in the form of capital appreciation. However, like any other fund, the returns are market-driven from the equity component of the portfolio. Though many fund houses strive to declare a monthly dividend, they have no such obligation.
With the current levels of market volatility, MIPs can be a good option considering their exposure to debt instruments. These will help you maintain a low-risk portfolio and generate relative regular and stable returns. Stability, rather than quick and high returns, should be the priority for a typical MIP investor. MIPs differ from Income funds, which are launched with the objective of posting regular returns (either in the form of dividends or capital appreciation) only from debt securities.
This story is from the {{IssueName}} edition of {{MagazineName}}.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the {{IssueName}} edition of {{MagazineName}}.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
ASK THE EXPERT
Ques. One of my friends told me that your company provides detailed Retirement plans. I want to know what is the procedure to get my Retirement plan. I will be retiring in March 2025. R.P Gupta, Noida
How to Naturally Reverse Fatty Liver Disease
The liver, located on the upper-right side of the abdomen, is the body’s largest internal organ and plays a critical role in detoxifying the blood and processing nutrients.
Banking sector which has underperformed in the last two years, now offers a favorable risk-reward profile
Do you think the market is overpriced? Is yes, should investors refrain from investing in index schemes at the current valuation?
India will continue to enjoy benefits of a close US relationship and trade will continue to grow
Q1. The US elections are said to be one of the closest till date, what impact will the election of a Republican / Democratic party have on the US economy and how is that going to affect India in the short as well as the long term?
Understanding Momentum Funds
Momentum funds are a type of investment fund that focuses on companies experiencing positive momentum in factors such as earnings, revenue, and stock price movement.
Risks and opportunities associated with Small Caps
Small-caps are a stock-picker’s paradise.
How to navigate your portfolio through bull market a
Indian equities have been in a bull run for the past four years.
Choosing mutual fund schemes depending on your age to achieve life goals
The choice of mutual fund (MF) scheme might be influenced by one’s risk profile or age.
Thematic Fund Or Sectoral Fund, Which Fund Suits You?
A thematic fund is a type of mutual fund that focuses on investing in companies based on specific themes or trends.
Be Kind To Your Kidneys
The kidney is a vital organ in our body which is four inches long and two and a half inches in width.
