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  • News From Press Want regular dividends? Balanced funds may not be your best bet

    Want regular dividends? Balanced funds may not be your best bet

    Source: Business Standard Mar 22, 2017
    Has a mutual fund distributor tried to sell a balanced (equity-oriented hybrid) fund to you with the promise of a regular each month? According to industry insiders, distributors are promising one per cent tax-free each month (12 per cent a year) on these funds. While are well suited for first-time investors in equities and for conservative investors, buying them to obtain a regular would be a mistake.
     
    Experts say that, technically, the promise of a one per cent each month might not be false. "It is possible that a person who has invested Rs 100 may get Rs 12 as payout. But if the fund hasn't appreciated 12 per cent in a year, it will pay out of its accumulated reserves. Its net asset value (NAV) will then take a hit," says Rajeev Thakkar, chief investment officer and director, PPFAS Mutual Fund. 

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