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Monthly Income funds fail to deliver |
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- Investors who have invested in several monthly income schemes of mutual funds have found that the payout to them in these schemes has stopped as the tough conditions in the markets impact the schemes.
- Many who invested in the hope that they will receive a regular return are now scrambling in trying to understand as to when they will get some money coming in to them. This position has occurred because of the fact that the schemes do not have the necessary funds to pay out.
- The reserves that the schemes have built up have been exhausted and this is the reason why the schemes have no option but to stop the payout that has to be made. There is no obligation on the fund to make regular payments but the scheme will make efforts to ensure that such payments are made.
- Investors have to understand that the risk in the scheme is on their own account and hence they will bear the impact of a poor performance by the scheme. This is not a guaranteed product
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