MLDs are non-convertible debentures where the payoff is not fixed but linked to the performance of specific market indicators. While the principal is generally protected, the returns vary depending on the underlying asset's performance, providing a unique balance between risk and reward.
Types of Market Linked Debentures:
- Principal-Protected MLDs: Offer full protection of the invested principal at maturity.
- Non-Principal Protected MLDs: Carry a higher risk as both principal and returns are subject to market conditions.
Features of Market Linked Debentures:
- Market-Driven Returns: Returns vary based on the performance of the underlying asset.
- Diversification: Provides exposure to various asset classes beyond traditional investments.
- Customizable Structures: Flexible in terms of tenure, underlying assets, and payout structures.
- Tax Efficiency: Certain MLDs may offer tax benefits depending on the structure and holding period.
- Risk Management: Principal-protected options reduce the risk of capital loss.
Market Linked Debentures offer a strategic investment option for individuals looking to diversify their portfolio with the potential for higher returns linked to market performance. Explore MLDs with RKS Wealth to balance risk and reward effectively.
