Skip to main content

Reliance MIP

 

Reliance MIP - Invest Online

 

If you can stomach risks that are somewhat higher than holding pure debt funds then Reliance Monthly Income Plan (MIP) is a good option. With a return of 11 per cent annually in the last five years as well as since its launch in December 2003, this debt-oriented fund is amongst the top performers in the monthly income scheme category. This return is also a good five percentage points over its benchmark Crisil MIP Blended index.


With higher average portfolio maturity compared with quite a few peers, the fund's debt portfolio may deliver over the next few months if interest rate cuts do happen.

Suitability

If you have no penchant for risk then Reliance MIP will not suit you. For one, it is a debt-oriented fund, but can invest 20-25 per cent in equities as well. That means in times of steep equity declines, the fund can slip in to negative returns. Two, even among the category of debt-oriented funds, Reliance MIP can be risky as it tends to take aggressive debt calls in anticipation of interest rate movements. Still, thus far, it has compensated investors with returns for the risk assumed.


If you wish to diversify your equity laden portfolio with some debt, this fund is a good choice. Reliance MIP also has a good record of declaring steady and high quantum of dividends for those you opt for pay out. While the fund is not required to declare dividend regularly (although it seeks to), you can certainly expect it to provide you with some additional income stream, if you are looking for one.

Performance

Reliance MIP tops the five-year chart of debt-oriented funds and is in the top three over a longer period of 7 years. The fund's three-year rolling return, since its inception is an average 11.7 per cent compounded annually. That means, irrespective of when you invested, your average three-year returns would have been around this figure. HDFC MIP Long Term comes close to this number on a rolling return basis. But it is to be noted that HDFC MIP Long Term, often times, goes over 20 per cent on equities. For instance, as of November HDFC MIP had a 25 per cent exposure to equities as against Reliance MIP's 19 per cent.

Among the universe of MIP funds, Reliance MIP also scores well on a risk-adjusted basis too, measured by the sharpe ratio. Over a three year period, Reliance MIP would have delivered an IRR of 10 per cent annually had you invested through SIP. Lump sum returns over this period was 8.4 per cent.

That said, Reliance MIP has had a taste of bitter pill too. It did not have a great period between late 2007 and the first half of 2008, Besides being hurt by the equity downfall in early 2008, the fund had also anticipated an interest rate decline a little too early. As a result it suffered negative returns in the first quarter of 2008 and remained lack luster up to mid-2008.

But to its credit, it made up by gaining 14 per cent in the December 2008 quarter, when interest rate cuts began. The above is an illustration of the risky call the fund took, albeit delivering in the end.

Portfolio

Reliance MIP currently sports a portfolio with average maturity of 7.49 years. That's far higher than the maturity profiles of HDFC MIP Long Term Plan or Canara Robeco MIP. But if interest rate cuts act in its favour, then the fund can deliver more. The fund has a fifth of its assets in government securities and about 38 per cent in corporate bonds.

While a good proportion of corporate bonds have top rating, the fund has less than AAA-rated securities from Reliance Infrastructure and Hindalco Industries. As the interest accrual on these slightly riskier bonds could be higher, the fund may well adopt a hold on them to mitigate risks. Equities account for a fifth of portfolio value. SML Isuzu, Mahindra Forgings and Torrent Power are some of the interesting stock picks.


The fund is managed by Amit Tripathi and Sanjay Parekh. An exit load of 1 per cent will be charged by the fund for redemptions made within a year of allotment.

Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015

1.ICICI Prudential Tax Plan

2.Reliance Tax Saver (ELSS) Fund

3.HDFC TaxSaver

4.DSP BlackRock Tax Saver Fund

5.Religare Tax Plan

6.Franklin India TaxShield

7.Canara Robeco Equity Tax Saver

8.IDFC Tax Advantage (ELSS) Fund

9.Axis Tax Saver Fund

10.BNP Paribas Long Term Equity Fund

You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds

Invest in Tax Saver Mutual Funds Online -

Invest Online

Download Application Forms

For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call

---------------------------------------------

Leave your comment with mail ID and we will answer them

OR

You can write to us at

PrajnaCapital [at] Gmail [dot] Com

OR

Leave a missed Call on 94 8300 8300

---------------------------------------------

Invest Mutual Funds Online

Invest Any Mutual Fund Online

Download Mutual Fund Application Forms from all AMCs

Popular posts from this blog

ULIP Review: ProGrowth Super II

  If you are interested in a death cover that's just big enough, HDFC SL ProGrowth Super II is something worth a try. The beauty is it has something for everybody — you name the risk profile, the category is right up there. But do a SWOT analysis of the basket, and the gloss fades     HDFC SL ProGrowth Super II is a type-II unit-linked insurance plan ( ULIP ). Launched in September 2010, this is a small ticket-size scheme with multiple rider options and adequate death cover. It offers five investment options (funds) — one in each category of large-cap equity, mid-cap equity, balanced, debt and money market fund. COST STRUCTURE: ProGrowth Super II is reasonably priced, with the premium allocation charge lower than most others in the category. However, the scheme's mortality charge is almost 60% that of LIC mortality table for those investing early in life. This charge reduces with age. BENEFITS: Investors can choose a sum assured between 10-40 times the annualised premium...

Am you Required to E-file Tax Return?

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   Am I Required to 'E-file' My Return? Yes, under the law you are required to e-file your return if your income for the year is Rs. 500,000 or more. Even if you are not required to e-file your return, it is advisable to do so for the following benefits: i) E-filing is environment friendly. ii) E-filing ensures certain validations before the return is filed. Therefore, e-returns are more accurate than the paper returns. iii) E-returns are processed faster than the paper returns. iv) E-filing can be done from the comfort of home/office and you do not have to stand in queue to e-file. v) E-returns can be accessed anytime from the tax department's e-filing portal. For further information contact Prajna Capit...

Section 80CCD

Top SIP Funds Online   Income tax deduction under section 80CCD Under Income Tax, TaxPayers have the benefit of claiming several deductions. Out of the deduction avenues, Section 80CCD provides t axpayer deductions against investments made in specific sector s. Under Section 80CCD, an assessee is eligible to claim deductions against the contributions made to the National Pension Scheme or Atal Pension Yojana. Contributions made by an employer to National Pension Scheme are also eligible for deductions under the provisions of Section 80 CCD. In this article, we will take a look at the primary features of this section, the terms and conditions for claiming deductions, the eligibility to claim such deductions, and some of the commonly asked questions in this regard. There are two parts of Section 80CCD. Subsection 1 of this section refers to tax deductions for all assesses who are central government or state government employees, or self-employed or employed by any other employers. In...

IDFC - Long term infrastructure bonds - Tranche 2

IDFC - Long term infrastructure bonds What are infrastructure bonds? In 2010, the government introduced a new section 80CCF under the Income Tax Act, 1961 (" Income Tax Act ") to provide for income tax deductions for subscription to long-term infrastructure bonds and pursuant to that the Central Board of Direct Taxes passed Notification No. 48/2010/F.No.149/84/2010-SO(TPL) dated July 9, 2010. These long term infrastructure bonds offer an additional window of tax deduction of investments up to Rs. 20,000 for the financial year 2010-11. This deduction is over and above the Rs 1 lakh deduction available under sections 80C, 80CCC and 80CCD read with section 80CCE of the Income Tax Act. Infrastructure bonds help in intermediating the retail investor's savings into infrastructure sector directly. Long term infrastructure Bonds by IDFC IDFC issued an earlier tranche of these long term infrastructure bonds on November 12, 2010. This is the second public issue of long-te...

Bharat Bond ETF

Top SIP Funds Online   The government of India has paved the way for the launch of India's first corporate bond ETF called as Bharat Bond ETF. Edelweiss Mutual Fund will be managing it. The fund is mandated to invest in AAA-rated bonds of select public sector companies (see the table 'List of constituents and their proportions in the portfolio'). The government has a threefold objective behind launching this product. One, to deepen the liquidity of the Indian debt markets and provide a gateway for easy retail participation. Two, to solve investors' dilemma of picking premium bonds. Lastly, to help the underlying government-owned companies raise funding for their operations. But does it make sense for you, the investor, to invest in it? Lets find out. What is the product? As the name suggests, it is an exchange-traded fund which will be listed on a stock exchange from where its units can be bought and sold post launch. It will have two variants - one maturing in 3 ye...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now