Note: This is an archived post of Capital Mind Premium.
“Capital Protection” funds are the new normal, it seems. You invest money that is locked in for three years, and 80% of that money is used to invest in debt instruments. If a Rs. 80 investment yields 9% a year, then a in three years you make 9% x 80 x 3 = Rs. 107 - that is, at least your original amount of Rs. 100 back.
What about the remaining Rs. 20 that is uninvested? They can buy stocks, or buy long . . .