MIP combines the power of equities with the stability of debt while offering the convenience of monthly income.
MIP is a debt-oriented scheme that generally invests up to 75-80 % of its corpus in debt instruments and the remaining in equity instruments. They operate on the proposition of combining the power of equities with the stability of debt. As the name suggests, MIPs are intended to offer monthly income.
Investment Objective
The primary objective of MIP is to generate regular returns through investment primarily in debt oriented mutual fund schemes. The secondary objective of the scheme is to generate long-term capital appreciation by investing a portion of the scheme’s assets in equity oriented mutual fund schemes.
MIP aims to provide reasonable returns on a monthly basis through investment in debt as well as a small portion in equities. Investors can invest predominantly in interest yielding debt instruments such as (commercial paper, certificate of deposits, government securities, and treasury bills). The debt investments ensure stability and consistency while the equity instruments in the portfolio boost the returns. MIPs are market-linked (to the extent of their equity portfolio).
The ultimate aim of MIP is to provide investors with regular pay-outs through dividends. However, it is not mandatory for the mutual fund scheme to pay regular dividends as it is subject to the discretion of the fund house and availability of distributable surplus.
Benefits of the Plan
This plan is ideal for investors who want reasonable returns in the form of dividends through investments