MLD
MLD (Market Linked Debentures)
Market Linked Debentures (MLDs) are a type of non-convertible debenture (NCD) where the returns ai linked to the performance of a market benchmark, such as an index (e.g., Nifty 50, Sensex), governmer securities, interest rates, or commodities. Unlike fixed-income debentures that offer a predetermined coupon rate, MLDs provide returns based on the underlying asset's performance.
Key Features of MLDs:
Market-Linked Returns: Instead of a fixed interest payout, returns are dependent on the movement of the linked benchmark.
Tenure: Typically, MLDs have a tenure of 1 to 5 years.
Principal Protection: Some MLDs offer principal protection, ensuring that investors get back at least the initial investment amount.
Tax Benefits (Earlier): Before April 2023, MLDs were taxed as long-term capital gains (LTCG) at 10% if held for over a year. However, recent tax amendments have removed this benefit.
Risk Factor: MLDs carry both credit risk (issuer default) and market risk (linked index fluctuations).
Types of MLDs:
Equity-Linked MLDs: Returns depend on stock indices like Nifty 50 or Sensex.
Interest Rate-Linked MLDs: Returns vary with government bond yields or RBI policy rates.
Commodity-Linked MLDs: Tied to commodities like gold, silver, or crude oil.
NCD vs Market Linked NCD
Examples of some of the MLD's currently available for subscription:
Nifty + 50 %
1.5X Return for each 1% Absolute Nifty Return
1X Return for each -1% Absolute Nifty Index Return
Tenure 42 Months
Nifty+65%
1.65X Return for each 1% Absolute Leap Index Return
1X Return for each -1% Absolute Leap Index Return
Tenure 42 Months
Nifty Mid Cap & Mid Cap Beta
Nifty Mid Cap
- 1X Return for each 1% Absolute Nifty Select Midcap Return
- Principal Protection in case Nifty Select Midcap is negative at maturity
- Tenure 42 Months
- Average First 6 months & Last 6 months
Mid Cap Beta
- 1.3X Return for each 1% Absolute Nifty Select Midcap Return
- Downside 1X for each -1% Absolute Nifty Select Midcap Return
- Tenure 42 Months
- Average First 4 months & Last 4 months
Twin Win - 6% FD + Nifty Return
Fixed Returns and Principal Protection1
Fixed Returns of 6.00% p.a.2 payable at maturity
Full Equity Upside , No Equity Downside
IN Nifty 50 indexes give more Than 6.00 % p.a , returns over 3 Years, Twin Win gives Nifthy 50 returns
In Case Nifty is down after 3 years ,you still get principal + fixed return
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Edelweiss Twin Win
Twin win gives the higher of Fixed Return (6.00 % p.a ) Or Nifty Returns over 3 years
Thus no need to allocate between Dept and Equity, Twin gives you the best of both
Nifty AWE
Make Returns of Up-to 50%
AWE gives 50% absolute return1 if Nifty gives 10% absolute return over 3 years
Without Equity Downside Risk
Your Principal is protected2 in case Nifty falls after 3 Years
Truly All Weather
Over last 10 years, AWE has given at least 50%1 at least 88% times3