What is Capital Protection Oriented Scheme ?
Capital Protection Oriented Schemes is oriented towards protection of capital and not with guaranteed returns. Such schemes derive their orientation towards capital protection from the specific nature of portfolio structure. For example, certain chunk of portfolio may be placed in highest AAA rated bonds in such a way that on maturity this chunk equals to 100 percent of original portfolio value. Thus original capital gets protected. The balance of portfolio may be invested in riskier assets in search of better returns. Trustees of the mutual fund company shall continuously monitor the portfolio of this type of scheme. In addition, a SEBI registered credit rating agency shall rate and review the portfolio structure every quarter of the year.
