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Best Monthly Income Plans To Invest In India

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Monthly Income Plans or MIPs are a category in mutual funds that invest in both debt or money market securities as well as equity (both listed and unlisted). And for this reason they are also categorized among hybrid funds. Investors scouting for realizing periodic income can bet on this investment option.

Best Monthly Income Plans To Invest In India
 

MIPs primarily in debt instruments i.e. as much as 80% and the remaining portfolio is constituted by equities so it is more of a debt oriented hybrid fund.

But herein there is a word of caution for new investors who considering the nomenclature as monthly income plan may be expecting guaranteed returns as these like other mutual funds are subject to market risk and hence returns from these are not guaranteed.

Pay out option in MIPs depend on the distributable surplus that the fund generates and in case the fund has failed to mop up surplus, investors not be given a payout which is usually given out as dividend.

Returns from MIPs: With most of their allocation towards debt, these mutual funds typically offer low-risk consistent return that is typically higher than fixed deposits. Further, the investor can choose to opt for either monthly or quarterly pay-out.

Who can invest in Monthly Income Plans?

These are suitable for all those risk averse investors who are looking for steady income source and can take some exposure in stock markets. Retirees or those nearing retirement also can invest in the investment option.

Below are listed down few of the MIPs that you can opt for regular pay-outs. The schemes are listed out considering return on an investment on a lump sum amount of Rs. 10000:

1.ICICI Prudential Regular Savings Fund-Growth: The fund size of the scheme is Rs. 1710 crore and carries an expense ratio of 2.01%. Fund has 75% of investment in debt of which 3% is in government securities and 55.8% in very low risk securities. NAV of the fund as on Feb 3, 2020 was 45.59. Investors can either invest a minimum of Rs. 5000 as one-time investment or start a SIP of just Rs. 100. Further, the scheme's benchmark index is Nifty 50.

 
On an investment of Rs. 10000 Latest Value Annualised returns
1 year return 11016.60 10.11%
3 year return 12653.90 8.16%
5 year return 15065.50 8.54%

2.Kotak Debt Hybrid fund: The total assets under management under the scheme are Rs. 264.48 crore. With Nifty 50 as the benchmark index, the fund attracts expense ratio of 2.21%. Individuals can invest either with a SIP of minimum of Rs. 1000 per month or Rs. 5000 as one time investment. NAV of the fund as on February 3, 2020 is 33.24.

On an investment of Rs. 10000 Latest Value Annualised returns
1 year return 11170.1 11.73%
3 year return 11862.1 5.87%
5 year return 14340.3 7.48%

3.SBI Debt hybrid fund- Growth: It has a AUM of Rs. 1068 crore and investors can invest a minimum of Rs. 500 as SIP and Rs. 5000 as one time investment. The benchmark for the fund is Nifty 50 and NAV as on February 3, 2020 was 41.73. The fund carries an expense ratio of 1.86%.

On an investment of Rs. 10000 Latest Value Annualised returns
1 year return 10942.9 9.38%
3 year return 11538.4 4.89%
5 year return 14027.6 7.00%

4.SBI Multi Asset Allocation Fund: The fund has an asset base of Rs. 253.76 crore and carries an expense ratio of 1.87%. NAV of the product as on February 3 is 28.69. Investors can either invest through the SIP route in the fund with minimum investment of 500 or lump sum as one time investment of Rs. 5000.

On an investment of Rs. 10000 Latest Value Annualised returns
1 year return 11005.3 10.00%
3 year return 12035.3 6.37%
5 year return 14415.4 7.58%

5.Franklin India Debt Hybrid Fund: Fund size of the mutual fund scheme is Rs. 303.63 crore and carries an expense ratio of 2.26%. Almost 70% is invested in the debt securities. NAV of the fund as on February 3, 2020 is 59.26. Investors can either invest through the SIP route in the fund with minimum investment of 500 or lump sum as one time investment of Rs.10000.

On an investment of Rs. 10000 Latest Value Annualised returns
1 year return 10928.7 9.23%
3 year return 11892.2 5.95%
5 year return 13745.9 6.57%

Note: The above data has been compiled using moneycontrol as on February 4, 2020. Mutual fund schemes are subject to market risk and may not offer replicate returns of the past.

Disclaimer: The article is not a solicitation to buy, sell in securities mentioned in the article. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and the author do not accept culpability for losses and/or damages arising based on information in this article.

About the author: Roshni Agarwal has been covering personal finance and stock markets for close to 5 years.

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