Important Points for IC 99 - Asset Management Exam
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In a debt / income scheme, a major part of the investable funds are channelised towards debentures, government securities, and other debt instruments.
Index schemes follow a passive investment strategy where you investments replicate the movements of benchmark indices like Nifty, Sensex, etc.
A tax saving scheme offers tax benefits to its investors. The funds are invested in equities thereby offering long-term growth opportunities. Tax saving mutual funds (called Equity Linked Savings Schemes) have 3-year lock-in period.
Gilt funds invest in government securities of medium and long term maturities issued by central and state governments. Net Asset Values (NAVs) of the schemes fluctuate due to change in interest rates and other economic factors.
Long Term Income Funds are for the portfolio maturity between 3 to 10 years. These funds benefit when interest retes falls as bond prices (NAV) and interest are inversely correlated. However, they are highly vulnerable to the changes in interest rates and are suitable for investors who have a long term investment horizon and higher risk taking ability.
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