SAFEGUARDS DURING VOLATILITY
Debt instruments are generally considered low-risk investments. This applies to FMPs too which invest in such instruments like Bonds, Debentures, etc. These safeguard your portfolio from losses during market volatility.
Debt Funds invest in Fixed-income instruments like Bonds and Debentures. These assets are valid for a certain ‘maturity period’. FMPs hold these assets till they mature, and do not sell off any of the assets to make pro?ts
Debt instruments pay a ?xed interest amount on a regular basis. This is why they are called Fixed-income instruments. FMPs pass these interest payments to investors. This can act like a secondary source of income.
MEET DIFFERENT GoalS
There are many kinds of FMPs depending on the type or maturity of the Fixed-income instrument they invest in. For example, there are FMPs which only invest in Bonds that mature in three years. These different FMPs can help meet a variety of Goals.
LIQUIDITY FOR EMERGENCIES
Most people park their money in Bank Accounts and Deposits. This is because they provide easy liquidity. FMPs can be a good substitute. This way, you can also earn higher returns and yet have funds available on a short notice