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But experts point out that though these funds are expected to do well, investors shouldn't overlook the risks associated with them. Like any other debt MF scheme, these stand to lose if the rates move up in the economy. Investors should also keep in mind that the default  is more if the fund manager is investing in bonds with lower rating. Alam asks investors to go for schemes with a good track record, and recommends SSI medium term fund, medium term opportunities fund and Birla Sunlife Medium Term Plan.

Investors should note that each of these schemes comes with exit load. For example, HDFC Medium Term Opportunities Fund charges 1 per cent  if units are sold before a year. Birlasunlife Medium Term Plan charges 2 per cent exit load if units are sold before completing a year, and 1 per cent exit load is charged for sale after 365 days but before 730 days.

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These funds aim at the twin benefits of high accrual income and capital appreciation when yields start coming down. AAA-rated bonds in the medium-term segment offer around 9.75 per cent, which is almost 150 basis points (bps) more than what they used to offer around six months ago. Towards the end of the financial year, the  typically witnesses tight  situation and rates remain firm.

This offers a good opportunity for these schemes to lock-in their corpus in attractive yields, say experts. "If yields fall by 50 basis points in the next year, you may see 2 per cent capital appreciation on the investment portfolio, which should  that investors take home around 10 per cent returns," explains Alam. If the fund manager opts for AA and A rated bonds, the returns can be even more, though it comes with an extra risk.

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While income funds invest in portfolios with an average maturity of more than seven years and short-term bond funds invest in portfolios with an average maturity of less than three years, bonds with residual maturity of 3-7 years are generally not picked up by . These funds are positioned to invest in this gap and take advantage of the prevailing attractive yields," says Tanwir Alam, founder and CEO, Fincart, afinancial planning entity.

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While income funds invest in portfolios with an average maturity of more than seven years and short-term bond funds invest in portfolios with an average maturity of less than three years, bonds with residual maturity of 3-7 years are generally not picked up by mutual funds. These funds are positioned to invest in this gap and take advantage of the prevailing attractive yields," says Tanwir Alam, founder and CEO, Fincart, a financial planning entity

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Women are generally better money managers. Well my statement holds good beyond house-hold budgets. You will be surprised to know that female hedge-fund managers have outperformed the benchmark. Study reveals that the testosterone level in Men makes them relatively less sensitive to risk-reward, which women are quite susceptible to or should I say Women’s sixth sense. However, some may find financial planning & investment quite intimidating which really is not the case unless you choose simply not to understand. Believe me it is no rocket science. Let me convey financial planning in a simple & easy to understand format

Pyramid is one of the most stable structures on earth. This planned approach is symbolic; it means that planning your finances can bring about financial stability. This ERGRE Model is aimed at Wealth Protection, Creating Wealth and subsequently transferring the same to your heir & loved ones. The bottom two pieces (ER) protects wealth, G&R is aimed at creating long-term wealth and finally E at the top is aimed at wealth transfer.

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These funds aim at the twin benefits of high accrual income and capital appreciation when yields start coming down. AAA-rated bonds in the medium-term segment offer around 9.75 per cent, which is almost 150 basis points (bps) more than what they used to offer around six months ago. Towards the end of the financial year, the money market typically witnesses tight liquidity situation and rates remain firm.

This offers a good opportunity for these schemes to lock-in their corpus in attractive yields, say experts. "If yields fall by 50 basis points in the next year, you may see 2 per cent capital appreciation on the investment portfolio, which should mean that investors take home around 10 per cent returns," explains Alam. If the fund manager opts for AA and A rated bonds, the returns can be even more, though it comes with an extra risk.

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Mid-term income funds a better bet amid 'High' yields

BNP Paribas, Kotak and DWS AMC have rolled out medium term income funds in the last fortnight. Canara Robeco AMC launched a similar scheme in January. IDFC, HDFC, Birla Sunlife and Religare AMC already have a similar scheme too. Why is this sudden focus on medium-term income funds?

"While income funds invest in portfolios with an average maturity of more than seven years and short-term bond funds invest in portfolios with an average maturity of less than three years, bonds with residual maturity of 3-7 years are generally not picked up by mutual funds. These funds are positioned to invest in this gap and take advantage of the prevailing attractive yields," says Tanwir Alam, founder and CEO, Fincart, a financial planning entity.

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It was a lovely winter morning with bright sunshine. I was jogging with my friend, after the jog we decided to have coffee.

He asked me a question, what is financial planning and why should one have one?

I was tempted to speak the normal spiel but I chose to answer differently. I told him I will reply to your questions in reverse order – first I will state why & then what?

I asked him on one simple question to convey my message.

How much money do you require to live your life comfortably (perhaps at current lifestyle levels) when you retire?

He was stumped. Just to tell you, he is a highly educated man graduated from IIT Delhi, a bright software engineer working with Oracle.

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Is our live more valuable than the car? I am sure we all will agree that it is much more valuable and moreover our lives are interconnected with many others.

Do we mandatorily and adequately cover our life against the potential risks that exists in our daily life. In most of the cases the answer would be NO.

We realize the importance of having insurance cover when we are faced with these real life situations. Have you ever realized how stressful it can be? These incident carry a lot of emotional trauma and to add to the same the financial burden can be very disturbing & stressful.

Life is uncertain and so are life’s events. There is always a risk & fear that something can go wrong. These events have financial implications and to protect us from the same we need Insurance protection. Proper insurance planning helps you to prevent your financial cart from being rocked. Insurance planning helps you transfer your risk for a small amount of money called "premium".

All individuals must have three types of risk protection.

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Women are generally better money managers. Well my statement holds good beyond house-hold budgets. You will be surprised to know that female hedge-fund managers have outperformed the benchmark. Study reveals that the testosterone level in Men makes them relatively less sensitive to risk-reward, which women are quite susceptible to or should I say Women’s sixth sense. However, some may find financial planning & investment quite intimidating which really is not the case unless you choose simply not to understand. Believe me it is no rocket science. Let me convey financial planning in a simple & easy to understand format  Pyramid is one of the most stable structures on earth. This planned approach is symbolic; it means that planning your finances can bring about financial stability. This ERGRE Model is aimed at Wealth Protection, Creating Wealth and subsequently transferring the same to your heir & loved ones. The bottom two pieces (ER) protects wealth, G&R is aimed at creating long-term wealth and finally E at the top is aimed at wealth transfer.

Read more at: http://www.moneycontrol.com/news/planning/womenbetter-money-managers_1058274.html?utm_source=ref_article