Market Linked Debentures (MLDs)
MLDs are non-convertible debentures wherein the returns are linked to the market and your capital is protected.
What are market linked debentures?
- Market Linked Debentures (MLDs) are structured products that were earlier available to a select few Ultra Rich
- MLDs are non-convertible debentures wherein the returns are linked to the market and your capital is protected
- The returns are determined on the performance of the underlying index. The underlying index could be equity benchmark, government yield, gold index etc.
- The advantage is that you are getting the exposure and upside in other markets such as equity (NSE Nifty) or G-sec, with low risk compared to investing directly into that asset.
Why MLDs are a good option for your portfolio
Beat the overheated market
With Market Linked Debentures, you can get the upside of the markets, but not the downside.
In case the underlying asset is down at the time of Maturity, your invested capital stays secure
Diversify your Portfolio
MLDs can be used as an instrument to diversify in order to reduce portfolio risk
Compared to traditional fixed income products MLDs have proved to have better returns
What are MLDs?
Market Linked Debentures are non-Market Linked Debentures (MLDs) debentures wherein the returns are not fixed but linked to the market.
Is MLDs tax-efficient?
One of the major benefits of investing in MLDs is tax savings. As per the regulations, 10% of the tax is applicable on long-term capital gains for listed bonds held for more than a year. Therefore, listed MLDs are tax-efficient. Unlisted MLDs are taxed at the rate of 20% with indexation if held for more than 2 years else, it is taxed as per your income slab rate.
What is the minimum investment?
With Altius you can start investing in MLDs for as low as Rs 10,000.
What determines my return on MLDs?
The returns are determined by the performance of the underlying index. The underlying index could be an equity benchmark, government yield, gold index etc.
Where do I see my MLDs after investment?
Once you have invested in any of the MLDs through Altius, the MLD will be transferred to your DEMAT account and will be visible on the same.
How are returns calculated for my investment?
The returns on the assets are XIRR (Extended Internal Rate of Return).
Returns are not calculated using the Simple Interest formula, XIRR is the metric used to calculate the returns on the future cash flows you receive on your investment.
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