Transcript: They are closed ended funds with a 3-5 year term. They invested 15-25% in equity, based on the assumption that if the equity money disappears, 75-85% invested in fixed income will grow to give your money back. These are very conservative investments.
If you are a long term investor, do not look at them as an option. Look at an MIP, a balanced fund, an equity income fund or even an all equity fund. If you are investing for the next 15-30 years, start with a balanced fund and move to a multicap fund over the next 3-5 years. Make your investments through SIP.
If you have a lumpsum to invest, say 10 lakh rupees, never invest in one go. Spread it over the next 15-18 months. Eliminating the possibility of getting a market high is very important for an investor when he's getting started. Capital Protection funds are very low yielding, they merely provide psychological relief.
This article was originally published on July 21, 2017.
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