Both products serve a similar purpose – they allow investors to lock into the existing portfolio yield. If these products are held till maturity, they take away the mark-to-market risk caused by interest-rate fluctuations. However, experts suggest that investors should opt for the former, owing to their superiority on several counts.
One, FMPs are usually launched for a horizon of up to three years. TMFs are available for a wider range of tenures, going up to 10-11 years.
Two, TMFs also have portfolios with higher credit quality. They usually invest in government securities (G-Sec), state development loans (SDLs), and triple-A rated public sector unit (PSU) bonds. Thus, they are low on credit risk. FMPs, on the other hand, invest in corporate bonds, which could be of below triple-A rating as well. (However, the higher risk can translate into higher returns.)
Three, TMFs are more transparent. A TMF replicates a public index. At the time of investing, the investor knows which bonds will be included in the portfolio. In the case of an FMP, he will just know the indicative portfolio (the ratings of the bonds that the fund manager
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Indians are Developing Weak Bones
In India, 1 out of 8 males and 1 out of 3 females suffer from osteoporosis, making India one of the largest affected countries in the world.
"The strategy behind the Tata India Innovation Fund centers on identifying companies that are driving transformative or incremental changes through innovation"
Yes, we certainly believe innovation is a powerful theme with immense potential for the coming years, and we are excited to bring it to our investors.
What is Hybrid Mutual Fund?
Hybrid Mutual Fund is a combination of more than one type of fund. While they invest in shares of companies listed on the exchange, like equity funds.
Should you invest in dynamic bond funds?
Dynamic bond funds have delivered a category average return of 8.68 per cent over the past year, making them the fourth best-performing category, following long-duration funds, constant maturity gilt funds, and gilt funds. With interest rate cuts yet to begin, these funds remain a viable option for investors seeking to benefit from possible rate reductions.
The Multicap Solution to India's MultiDimensional Growth
India is entering a transformative era of economic growth, backed by a unique combination of demographic strength, infrastructure development, and rising global prominence.
The Long-Term Benefit of Investing in Children's Future
A child is the most treasured part of any parent's life, and naturally, we want to give them the best of what the world has to offer. This often means not only ensuring we can meet their needs but also nurturing them to pursue their unique aspirations. Each child has their own dreams and challenges, making the early years critical as they lay the foundation for a healthy and fulfilling future.
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
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The liver, located on the upper-right side of the abdomen, is the bodyâs 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?
