I am looking for an instrument to buy and pledge and use for F&O margin… There are many instruments available but my primary focus is capital protection and liquidity.
I explored the RBI bonds, but the liquidity is not as expected. Say if i want to sell my bonds for some major reason, liquidity is not there…
Investing in mutual funds - debt - though good one, but associated with redemption charges, and rarely decrease in capital.
SGB - risk of capital reduction and liqudity.
I am not sure on Liquid funds - how much return they get… I am expecting an instrument with FD return.
Pls advise a best option.
I know there is nothing comes with 100% risk free but i am looking for something reasonable
FD can be from couple of weeks to 5+ years, so generalizing wont make sense.
If you want 90-180 day type return use liquid funds, something like 1 year is money-market fund and long-term are Gilt funds.
Check in Z pledge list first to be sure that the instrument is accepted.
I use a combination of
- Money market funds
- Gilt Funds
- Conservative + Dynamic Hybrid Funds
If Nifty falls more than 10% from its top, I might buy some NiftyBees or aggressive hybrid funds.
Obviously useful Jason… Thanks… I am thinking of getting it done via money market funds as my primary motive is liquidity and capital protection
Money market funds - is it trated as cash equivalent?
Thanks chirag… Not generalising, the duratiin is about 1 year
You could look into arbitrage funds.