Current situation is tricky.Markets have faced resistance at current levels before & though market experts believe that market can offer good returns from this point,retail investors still not looking much convinced.Similarly interest rates are trending down & investment in bond funds & income funds have become more attractive.
So after viewing the current market condition,there is one flow of opinion that monthly income plans which have 20-30% exposure in equity is a better bet.Even if market get corrected from this level there won’t be capital erosion in same proportion & if market moved up sharply there will be some equity exposure which will be helpful. similarly income funds which offers in bond funds & other debt products can offer good combination alongwith MIPs.
History shows that MIPs have offered good returns with lower risk when market have performed better.
Best Monthly Income Plans:
| Sr.No | Fund Name | Returns Last One Year |
| 1. | IDFC Monthly Income Plan | 13.30% |
| 2. | SBI Magnum Monthly Inome Plan | 13.03% |
| 3. | HSBC Monthly Income – Savings Plan | 11.80% |
Bond Funds:
| Sr.No | Fund Name | % Returns – Last One Year |
| 1. | SBI Magnum Dynamic Bond Fund | 12.80% |
| 2. | IDFC Dynamic Bond Fund | 12.20% |
| 3. | Sundaram Bond saver | 11.95% |
Income Funds:
Income funds have also exposure towards bonds but since they have more diversified portfolio they carry less risk than pure bond funds.
| Sr.No | Fund Name | % Returns – Last One Year |
| 1. | Templeton India Income Builder | 11.05% |
| 2. | Religare Active Inome Fund | 10.95% |
| 3. | Icici Prudential Income Opportunities | 10.55% |
MIP Or Bond Funds – Which one is the best?
My opinion is slightly tilted towards MIPs as probability is higher that market will have some upward movement & there is limited downside.So for conservative investor who is looking to think beyond fixed deposits can consider to blend income / bond funds along with monthly income plans with some higher weightage.
