In recent few days there have been a deluge of Capital Protection Funds from Mutual Fund houses. I have often been asked should I invest in these Capital Protection Funds?
We hate to loose our hard earned money. Taking advantage of this emotion, Mutual Funds launch Capital Protection Fund when the stock market is volatile. These funds promises investors to give a minimum guaranteed return which is the capital invested or may be a nominal appreciation of 10% on the same at the end of investment tenure.
But do you know you its easy to create your own Capital Protection Fund!
This can be done in two ways.
Both the concepts are explained below with examples.
In case you are in Hurry or prefer short reading below is the picture:
Both the above solutions are good and both the methods work equally well for capital protection. Now go ahead and create your own Capital Protection Fund!
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Great post. While I agree with you that doing it yourself will give a clearer picture as to how each segment - equity and debt is performing, and an be monitored in a better way,for the common man with limited knowledge of finance, doing so may be cumbersome and time consuming. The capital protection plans by MFs are professionally managed and hence the fund manager, if efficient enough would be able to timely switch between debt and equity to maximise the return.
Thanks! An eyeopener and simple to follow post
Did you create a capital protection fund for yourself?