What should you choose and why: Target maturity funds or fixed maturity plans?
Updated: 01 Sep 2022, 08:21 AM IST
TL;DR.Target maturity funds and Fixed maturity plans are two of the various debt mutual funds that are rising in popularity. There are some areas where one scores above the other. Let us try to draw a comparison between the two.
Target Maturity Funds, as opposed to FMPs, are better equipped to manage credit risk as well as interest rate risk because their portfolio includes G-secs, State Development Loans, and AAA-rated PSU Bonds.