What are Target Maturity Funds? Benefits and Limitations | Should you invest in TMF
14.9 هزار بار بازدید -
3 سال پیش
-
Not many of you know
Not many of you know about Target Maturity Mutual Fund, Target maturity funds are debt mutual funds that invest in a portfolio of high quality bonds of a defined maturity. The most obvious part of this definition is the target maturity fund has a specific maturity period that it is targeting which is done by having bonds in the portfolio whose expiry date is very close to the target fund’s maturity.
What makes them different from other fixed-income instruments? In this video, we tell you everything you need to know about Target Mutual Funds.
Topics Covered here:
00:00 INTRODUCTION
00:55 WHAT ARE TARGET MATURITY FUNDS?
05:34 BENEFITS OF TARGET MATURITY FUNDS
07:57 SHORTCOMINGS OF TARGET MATURITY FUNDS
09:11 SHOULD YOU INVEST IN TARGET MATURITY FUNDS?
BENEFITS OF TARGET MATURITY FUNDS
1. Eligible credit risk - because their holdings comprise mainly of government securities, SDLs, and PSU bonds
2. Low impact on interest rate movements and this happens on account of the hold-unto-maturity strategy also known as the accrual strategy that these funds follow
3. Low costs as target maturity funds generally adopt an ETF or an index fund structure.
4. Tax efficiency offered by target maturity funds which prove super handy when compared to traditional investment avenues like fixed deposits
5. The predictability of returns that investors get for staying invested until the maturity of the fund
Blog:
https://www.etmoney.com/blog/indexati...
SHORTCOMINGS OF TARGET MATURITY FUNDS
• Not having a performance history for any of the schemes listed
• Limited room there is for fund managers because the fund’s holdings need securities to be picked from a specific maturity and from within a particular index which can really constrain the universe of available instruments
• If investors don’t hold the fund until maturity .. then in that case, the investment will be affected upwards or downwards by interest rate movements.
#TargetMaturityFunds #WhatareTargetMaturityFunds #TargetMaturityFundBenefits
👉 To invest in Direct Plans of top Mutual Funds for free, download the ETMONEY app: https://etmoney.onelink.me/unJQ/5ca1a...
👉Read more such informative articles at https://www.etmoney.com/blog
👉 Follow us on:
► Facebook: Facebook: ETMONEY
► Twitter: Twitter: etmoney
► Instagram: Instagram: etmoney_official
► LinkedIn: LinkedIn: et_money
What makes them different from other fixed-income instruments? In this video, we tell you everything you need to know about Target Mutual Funds.
Topics Covered here:
00:00 INTRODUCTION
00:55 WHAT ARE TARGET MATURITY FUNDS?
05:34 BENEFITS OF TARGET MATURITY FUNDS
07:57 SHORTCOMINGS OF TARGET MATURITY FUNDS
09:11 SHOULD YOU INVEST IN TARGET MATURITY FUNDS?
BENEFITS OF TARGET MATURITY FUNDS
1. Eligible credit risk - because their holdings comprise mainly of government securities, SDLs, and PSU bonds
2. Low impact on interest rate movements and this happens on account of the hold-unto-maturity strategy also known as the accrual strategy that these funds follow
3. Low costs as target maturity funds generally adopt an ETF or an index fund structure.
4. Tax efficiency offered by target maturity funds which prove super handy when compared to traditional investment avenues like fixed deposits
5. The predictability of returns that investors get for staying invested until the maturity of the fund
Blog:
https://www.etmoney.com/blog/indexati...
SHORTCOMINGS OF TARGET MATURITY FUNDS
• Not having a performance history for any of the schemes listed
• Limited room there is for fund managers because the fund’s holdings need securities to be picked from a specific maturity and from within a particular index which can really constrain the universe of available instruments
• If investors don’t hold the fund until maturity .. then in that case, the investment will be affected upwards or downwards by interest rate movements.
#TargetMaturityFunds #WhatareTargetMaturityFunds #TargetMaturityFundBenefits
👉 To invest in Direct Plans of top Mutual Funds for free, download the ETMONEY app: https://etmoney.onelink.me/unJQ/5ca1a...
👉Read more such informative articles at https://www.etmoney.com/blog
👉 Follow us on:
► Facebook: Facebook: ETMONEY
► Twitter: Twitter: etmoney
► Instagram: Instagram: etmoney_official
► LinkedIn: LinkedIn: et_money
3 سال پیش
در تاریخ 1400/04/18 منتشر شده
است.
14,975
بـار بازدید شده