What are Target Maturity Funds (TMFs)?

"Open-ended debt funds with a specific maturity date" "Closed-ended equity funds with variable maturity" "Hybrid funds with a focus on real estate" "Index funds tracking the performance of gold prices"

What is a key difference between TMFs and Fixed Maturity Plans (FMPs)?

"TMFs are open-ended, while FMPs are closed-ended" "TMFs invest in equities, while FMPs invest in bonds" "TMFs are passively managed, while FMPs are actively managed" "TMFs have a shorter maturity period than FMPs"

What types of bonds do TMFs primarily invest in?

"Corporate bonds with high risk and high yield" "International bonds denominated in foreign currencies" "Government securities and bonds issued by public sector undertakings" "Municipal bonds issued by local governments"

What is a potential advantage of TMFs compared to other bond funds?

"They offer guaranteed returns, eliminating market risk" "They provide indexation benefits for long-term capital gains tax" "They allow investors to actively trade bonds within the fund" "They have a shorter lock-in period, providing greater liquidity"

What is a potential risk associated with investing in TMFs?

"Early exit from a TMF may expose investors to interest rate risks" "TMFs are highly volatile and subject to frequent price fluctuations" "TMFs lack diversification, concentrating investments in a single bond" "TMFs are illiquid and difficult to sell in the secondary market"