What are the advantages of investing in Target Maturity Funds?

What are the advantages of investing in Target Maturity Funds? zoom-icon

Over the years, investors have been moving from traditional savings products like fixed deposits, PPFs, and post office savings schemes towards debt funds in search of better tax-adjusted returns. However, the uncertainty of returns and the risk of losing their principal weighs heavily on them while making the shift. Target Maturity Funds (TMFs) are passive debt funds that offer several advantages over other debt funds including FMPs.

Before we move to target maturity fund benefits, let’s see what’s the defining feature of this category of debt funds. Target maturity funds have a specified maturity date and the expiry date of the bonds in its portfolio are aligned with this maturity date. Thus, the duration or time to maturity of the fund keeps reducing as time progresses. Also, all the

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