Mutual Funds Monthly Income Plan

Typically monthly income plan is a combination of debt and equity assets in which more 65 of the assets are invested in fixed income yielding instruments.

Mutual funds monthly income plan. Investors have the luxury of liquidity while having a regular inflow of dividends. Short term capital gains stcg taxes are applicable on the units which are held for less than 3 years. Monthly income plans known as mips are debt oriented hybrid mutual funds that give a fixed return every month to the investor. So the long term capital gains ltcg taxes are applicable on the units which are held for 3 years or more.

The ratio of equity investments is considerably low but is just enough to give you an added advantage to the stability of the debt part of the fund. Mips are best suited for retirees who seek a steady income instead of capital gains. Mutual fund monthly income plans tax implications mutual fund mip schemes are treated as debt oriented schemes non equity funds. For the aggressive monthly income plans 16 30 is invested in equity securities while the remaining amount is invested in the debt securities.

Meaning the majority of the portfolio is invested in debt and money market instruments which is why mip is a moderate risk scheme. Monthly income plan monthly income plan is a sort of mutual fund plan which basically invests primarily in equity securities with a necessary of generating cash flows and saving capital. Monthly income plans fall under the hybrid mutual fund category and they are essentially debt oriented. The monthly income plan is an open ended mutual fund that predominantly invests its assets in fixed income instruments.