MIP Funds Income Guarantee

 

MIP Funds Income Guarantee

Do MIP Funds offer Regular Income Guarantee?

This is the one of the most commonest query that readers ask me. In fact, many readers have a misbelieve that, Monthly Income plans (MIPs) offer guaranteed monthly income.

Well, this is a Myth. The truth is that, MIP Funds don’t offer regular fixed monthly income.

MIPs are basically hybrid funds which invest majority of your money in debt (70-90%) and minor amount in equity for better returns (25-30%).

It is the debt portion of MIPs which provide stability and protection of your wealth. While it is the equity component which will provide the growth in the up market.

Thus, the returns generated by MIPs are depending on stock market returns also.

However, keep in mind that, most of the MIP funds in India have proven past record of good performance and as the name suggests, they have declared dividends every month. Thus, they are really the monthly income plans.

So What I advise you is that, if your main aim is to generate income from your capital than MIPs are really superior financial products than the bank fixed deposits.

You can visit some good fund rating agency and choose 4star or 5 star rated MIPs from it and invest in them. Most of the MIP funds of India are well managed and as the name suggests, they declare ALMOST regular dividends on the monthly basis.