7 Best Monthly Income Plans (MIPs) To Consider For 2017

Posted By: Staff
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Monthly Income Plans (MIPs) are best for individuals who are looking for steady income. Monthly Income Plans from mutual funds are nothing but debt funds as they invest most of the corpus in debt instruments.

Aggressive MIP funds invest 16%-30% in equity securities and the remaining in debt securities. This can be a bit risky for retirees and ultra-conservative investors as the investment portion is higher in aggressive MIPs.

Individuals can opt for Dividend or Growth depending on the choice of funds. Taxation for MIPs will be same as debt funds where the investment is locked in for three years, they get indexation benefits.

Individuals can consider MIPs in falling interest rate regime. The only concern being that since these funds cannot guarantee you fixed returns like bank deposits.

Here are 7 Best Monthly Income Plans, that can give steady income in 2017:

Birla Sun Life MIP II - Wealth 25 Plan

The Fund has generated a return of almost 16.08 per cent in the last one year. Birla Sun Life MIP II - Wealth 25 Plan is among the few funds that has given returns of almost 15.56 per cent in the last 3 year. 

The Fund was launched in 2004 and has given a return of 10.73 per cent since its launch. Individuals can start to invest in the fund with a sum of Rs 1000 and then a small sum of Rs 1000.

Investors can give 6 post dated cheques for investing in the systematic investment plan. This Monthly Income plan is ranked number one by Crisil and five star rating by Value Research Online.

The scheme has allotted 70%-80% in debt and money markets instruments and 20%-30% in equity & equity related instruments. The assets under management is about Rs 2,000 crores.

Kotak Monthly Income Plan

Kotak Monthly Income Plan has given a return of almost 11.62 per cent in the last on year. Bulk of the money of the fund is invested in debt oriented securities. The fund's exposure to shares like ICICI Bank and ITC has ensured that it has performed well in the last few years. It also has exposure to Bata India and Eris Lifesciences

The investment objective of the scheme is to enhance returns over a portfolio of debt instruments with a moderate exposure in equity and equity related instruments.

The fund is ranked number one by Crisil and has a three-star rating by Value Research Online. The minimum investment amount is Rs 5,000. There is 1 per cent exit load for redemption within 365 days. Go for these schemes even if you have a long term investment philosophy in mind.

Franklin India Monthly Income Plan - Plan A

Franklin India Monthly Income Plan fund is ranked number two by Crisil and has a three-star rating by Value Research Online. The fund has given an average return of 13.98 per cent for the last 3 years. The minimum investment amount is Rs 10,000.

There is 1 per cent exit load for redemption within 365 days. The Fund was launched in 2010 and has given a return of 10.31 per cent since its launch. Individuals can start to invest in the fund with a sum of Rs 1000 and then a small sum of Rs 500. The portfolio of the fund consist of stocks like HDFC Bank, Yes Bank, Infosys and Kotak Mahindra Bank. The assets under management are rather small at Rs 453 crores.

HDFC Monthly Income Plan - LTP

This is a hybrid debt oriented aggressive fund. HDFC Monthly Income Plan is ranked two by Crisil. The fund has given an average return of 11.46 per cent for the last 3 years. The Fund was launched in 2003 and has given a return of 11.43 per cent since its launch. Individuals can start to invest in the fund with a sum of Rs 5000 and then a small sum of Rs 500.

There is 1 per cent exit load for redemption within 365 days. The portfolio of the fund consist of stocks like ICIC Bank, SBI, Infosys and L&T. There is also a heavy exposure to government of India securities and bonds.

ICICI Prudential MIP 25

ICICI Prudential MIP 25 is ranked number two by Crisil and has a three-star rating by Value Research Online. The Fund was launched in 2004 and has given a return of 10.43 per cent since its launch. Individuals can start to invest in the fund with a sum of Rs 5,000.

The last three-year returns of the fund has been close to 14.16 per cent. The portfolio of the fund consist of stocks like Motherson Sumi, Natco Pharma, Bajaj Finserv and HDFC Bank. The fund also has exposure to 7.61% GOI 2030 and 7.88 per cent government of India security.

 

UTI MIS Advantage Plan

UTI MIS Advantage Plan is ranked number three by Crisil and star-three rating by Value Research Online. The MIP has given a return of 10.30 per cent since its launch. Individuals can start to invest in the fund with a sum of Rs 5,000.

The last three-year returns of the fund has been close to 11.34 per cent. The portfolio of the fund consist of stocks like Bajaj Finance, Indusind Bank, Yes Bank and Infosys. The fund is bench marked against the Crisil MIP Blended and falls under the category Debt-Oriented Conservative. The fund also has exposure to government of India securities and also 8.39% Rajasthan State 202. 

Reliance Monthly Income Plan

Reliance Monthly Income Plan is ranked number three by Crisil and star-three rating by Value Research Online. The fund is bench marked against the Crisil MIP Blended and falls under the category Debt-Oriented Conservative.

The MIP has given a return of 10.86 per cent since its launch. Individuals can start to invest in the fund with a sum of Rs 5,000. The last three year returns of the fund has been close to 13.698 per cent. The portfolio of the fund consist of stocks like HDFC Bank, and Infosys. The fund also has debt exposure including the likes of 8.17 per cent Government of India 2044. 

Taxation on MIPs

MIPs are more tax efficient than bank deposits. These are debt oriented mutual fund schemes and are hence governed by the mutual fund taxation principles. For example, dividends are tax free in the hands of the investors. On the other hand any profit made by the investor through sale before one year is treated as Short-Term Capital Gain and is taxed in the same income-tax slab to which the investor belongs. One has to be careful on the taxation before investing in the same.

Now in the case of MIPs what is important to note is the fact that you should consider the best option for you. If you believe that you need to be a little risk averse you would do well to chose the MIPs, where there is no or very little. This is true especially if you have retired and safety is of paramount importance to you. We have tried and selected the best possible Monthly Income Plans. However, we wish to state that investments in these are pretty dynamic, in the sense you may want to monitor your portfolio more frequently then you do otherwise.

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