This video will discuss about monthly income plans (MIP) offered by mutual funds
Edited highlights
0:06 This video will discuss about monthly income plans (MIP) offered by mutual funds
1:22 MIPs are debt-oriented hybrid mutual funds
1:27 This MIPs invest in debt and equity
1:35 The portion of debt is around 75-80%
1:42 The remaining 15-25% and sometimes, 15-30% can be invested in equities
2:08 It is called monthly income plan since the fund house declares periodic dividends. Generally, they declare monthly dividends but they are bound to declare them
2:15 Dividends could be monthly, quarterly or half-yearly
2:19 Remember, dividends will only be declared when there are profits made by the fund
2:26 There could be a quarter where there may not be any dividend
2:42 Regular dividends generate regular income for the investor
2:48 Investor can also apply for a systematic withdrawal plan (SWP) simultaneously in a MIP plan
2:54 This ensures that whatever income declared is additional income from the fund
3:02 The money can be transferred to a savings account or to another fund
3:20 MIPs are useful for retired individuals with retirement savings, people who want a regular income, people in mid-career stage or those who have taken voluntary retirement
3:35 It could also provide regular income for home makers from their accumulated savings
3:50 Because of the equity investments of an MIP, the income may not be regular since dividends are not constant
4:00 Periodicity of dividends is not constant and the amount may not be constant
4:07 Investors who are prepared for the risk of such volatility can opt for an MIP
