‘Income Funds’ for good returnsFriday, May 22, 2009 3:54 pm
Knock on the doors of income funds as majority of the equity mutual funds deterred investors’ spirit with downbeat proceeds of over 40% in 2008.
Without an iota of doubt, last year was discouraging for investors as prowling bears swept away the stock market. Real estate fell apart, equity funds dipped. In short, the entire economic picture was really grim. However, a gleam of light for investors emerged with Income Funds. A previous quarter rally in costs helped when interest rates began to drop.
Interest rate sequence seems to be on an apparent change, thus we are hinting at secular fall in interest rates. Only interest rate driven funds prosper in such scenarios and income funds are one such class and therefore, money is drawing from carry funds and fixed deposits driving into income funds.
As far as the market experts’ views go, domestic stock markets would also have an extended wait before they begin a good growth route with international markets taking their time to recuperate. The question remains whether income funds turn out to be beneficial for retail investors with money pouring in swiftly into such funds.
Most income funds are churning out annualized profits varying from 10- 40% over last three months and retail investor should certainly consider income funds as they are a dependable path to good proceeds. Nevertheless, such funds should emerge with a prospect of six months to a year as they are interest rate vulnerable.
A possibility to see lucrative returns seems to have loomed large through Income Funds with profits from other services like Fixed Maturity Plans taking a downturn. It’s promising at least for those who look for decent short term investments.
So, take income funds as an option to see your money grow.