Business Standard

Debt fund growth option: A smart choice for retirees

A growth scheme not only leads to lower tax payments than the dividend option but also allows any income that is not withdrawn to compound

Mutual funds, sebi, investors, MF, equity, sensex, market, funds, shares, stocks, FDI, FPI, investment, growth

Harsh Roongta

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My friend Taresh wanted to invest Rs 1 crore in a secure debenture instrument that would yield an annual return of Rs 6 lakh and return the principal after 30 years. He wanted to create a passive income source that would pay a fixed amount periodically during retirement.

I recommended investing in a mutual fund that invests in similar debentures, as it would offer superior risk management, liquidity, and return. Risk would decrease due to diversification across multiple instruments. Liquidity would be better since the fund house would allow daily redemption at net asset value (NAV). Choosing a fund’s growth
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of or the Business Standard newspaper

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First Published: Apr 23 2023 | 9:19 PM IST

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