Click to play videoMumbai: If your equity investments are coming in with a pinch of salt, it pays to have a healthy dose of debt.
A monthly income fund that allocated upto 80% of their corpus in debt instruments have tasted better than all other categories of mutual funds.
The best performing MIP - principal MIP growth has given returns of 11.7%. Compare that to top diversifed equity scheme -ICICI Pru Infra - or even an ELSS - Sundaram tax saver that have given returns of up to 11.3%.
It would prove to have a mix of both, as MIPs have zoomed ahead of balaced funds and pure debt categories too which have given returns of up to 10.8%.
Head of Crisil Fund Services, Krishnan Sitaraman said, “The MIP category actually provides a cushion to investors in a scenario where equity markets are in a downturn. Only around 20-30% of their money is in the equity category where as the balance is in debt. Hence in a downturn the negative for the category is only coming from the 20-30% invested in the equity markets.”
The last 3 years when the markets had a good run up, diversifed equity funds have 34%, and monthly income plans have managed to give returns of upto 37%.
Experts say a broad based portfolio with the right proportion of debt & equity, may help you overcome volatile times.
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