An investment plan or portfolio in which the liabilities are matched with equivalent cash flows is called Dedicated Portfolio. Dedicated Portfolio generally consists of sound fixed- income investments which generate regular cash-flows. Fixed Income securities like bonds are accumulated and held till maturity. The interests and maturity is matched as per payment/cash needs over the specific period. The funds or debt paper used is of good credit quality and takes into account the risk, stability of returns and protection of capital.
Advantages of a Dedicated Portfolio are:
1. Stable and cash generating at regular intervals/timelines.
2. Proper risk management strategy helps to prevent three essential risks-inflation risk, liquidity risk and market risk.
Limitations of Dedicated Portfolio are:
1. It is not easy to calculate future cash flows mathematically for everyone.
2. It limits the portfolio and the expected returns as it might otherwise fetch by utilising other investment products.
3. Investment choices available are quite limited.
A PPF calculator is an online tool that helps you calculate the maturity amount at…
Non-resident Indians are not allowed to open a new PPF account. However, if a resident…
PPF rules do not allow joint accounts. An account can only be opened in the…
After the maturity of the PPF account, you have the option to extend it for…
From the 7th financial year onwards, you can make partial withdrawals from your PPF account.…