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MIP Investment Ambiguities

There is some equity exposure to this instrument

I have invested in the post office monthly income scheme (MIS) for a monthly income. Can monthly income plans (MIP) in mutual funds give me higher guaranteed returns than the MIS along with capital appreciation?
- Nitin Kanungo

Do not invest in MIPs if a guaranteed income is your priority. MIPs will invest about 10 – 20 per cent of their portfolios in equities, and are like conservatively positioned funds.  Despite a portfolio primarily in fixed income instruments, there may be intermittent declines in the value of their investments.

Their equity portion helps them better the performance of pure debt funds in rising equity markets. In a time frame of more than 3 years, they can give you better returns than other debt investments and help beat inflation in a relatively stable manner.

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