What is SIP?
SIP means a systematic investment plan. It
is the easiest way to invest in mutual funds at any intervals viz.
weekly, monthly or quarterly as per preferences. A SIP model is nothing but a
method where a fixed amount is auto-debited from the investor’s bank account
and a certain amount of mutual fund units are bought based on their price on the
date of investment. This way when the market is low, more units come into
investor’s portfolio which later at the time of liquidation can be sold
handsomely.
What are hybrid mutual funds and how are they taxed? Every investor is different. There are some who like taking risks and enjoy the potential of high returns. On the other hand, there are some who are very conservative in terms of taking risks. They don’t mind the low returns as long as they are assured of capital security. Then there are those who are in the middle of the risk spectrum. They are not too aggressive neither too conservative. They look for moderate risks with moderate returns. To suit the investment preference of these different types of investors, mutual funds come in different variants. One such variant is the hybrid mutual fund which is suitable for moderate investors who lie in the middle of the risk spectrum. Let’s understand the concept of hybrid mutual funds and their tax implications – What are hybrid mutual funds? Hybrid funds are mutual funds which invest in both equity as well as debt instruments. The return potential of equity investment is adde...
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