Portfolio Management Services (PMS) offer Capital Protection Schemes to the wealthy Individuals to protect their wealth as well as Capital Gains.
The Capital Protection Schemes work like this. These Schemes Invest most of its Money (Usually up to 75%) in Fixed Income instruments and with the rest of the money (25%) it invest in the equity markets to boost the returns.
But as all of you know that, India slips into a Deflation so Government and several banks have reduced the interest rates on their fixed income instruments. And that’s why Capital Protection Schemes are in trouble. Because a year ago, they could invest 75% in Fixed Income plans to ensure capital protection but now they are forced to invest up to 85% in debt instruments.
Wealthy Individuals invest their money in these schemes to protect their wealth during the down market.
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