Unique offerings with FMPP

Aug 16, 2022

In this blog, we shall go through points that one has to take into consideration while deciding which investment avenue to choose. Later on, we shall see the types of portfolio diversifications one can choose for. Finally, we’ll take a look at where FMPP stands in the overall offering of benefits.

Why investing is important in financial planning

Savings can be a good habit to develop as a healthy financial practice. Saving from every earning cycle means not only managing the finances well but also saving for emergency needs, especially medical emergencies and un financial needs.

Investing is taking a step ahead of savings. When done rightly and strategically, it can be useful in tax benefits, wealth building, and so on. Saving is needs-assessing, whereas investing is being foresighted.

Short-, medium-, and long-term investments

One of the most perplexing questions for some is whether to invest with short-, medium-, or long-term goals. Well, it all depends on one’s financial objectives. 

Short-term investments are no better than savings, albeit with an equal chance of earning as well as losing. Hence, short-term investments are always frowned upon by prudent investors. 

Long-term investments are meant for long-term goals, particularly wealth-building, planned big purchases, etc, owing to their high returns-yielding potential. However, their long-term nature may be a detractor for some investors. 

Medium-term investments are balanced between good returns and volatility. Besides, since they give liquidity within a medium term, they are regarded as ideal investments. Some medium-term investment avenues require recurring investments, whereas some don’t.

Points to consider for opting for a medium-term investment

Apart from the medium-term nature of an investment avenue, there are other points to be taken into consideration, namely its potential of yielding returns, market volatility, etc. This may seem simple: the higher the returns one investment avenue can potentially yield, the more volatile it is. Hence, fixed deposits, recurring deposits, postal schemes of investments, etc are on the lower spectrum of yielding returns, but they are the safest. On the other hand, market-linked asset classes, namely mutual funds, and primary and secondary market assets, are the most market volatility-prone but can potentially yield higher returns.

Traditional investment avenues vs P2P lending

As we see, traditional investment avenues do not offer a single solution in terms of investment. Hence, portfolio diversification is a means to make both ends meet.

P2P investments are regarded as a new-age solution for investment. They strike a balance between low volatility and high returns. LenDenClub, India’s pioneer in the P2P sector, has delivered best-in-class returns of 10 to 12%* p.a. along with consistently low NPA for the past five years. 

Portfolio diversification, an indispensable means in traditional asset classes

One way of achieving the mean in traditional investment avenues is by opting for portfolio diversification. It can be done in two ways, namely latitudinal and longitudinal diversifications. In the former, an investment amount is spread across investments in different investment avenues. In the latter, one can go for repeated investments across times, with different maturity periods. Going for a balance of both is something most prudent investors choose. 

FMPP, a new-age solution for all investment needs

FMPP, the Fixed-Maturity Peer-to-Peer Plan from LenDenClub, has been designed to

give returns of up to 10 to 12% p.a.*. LenDenClub has kept up the returns proposition of 10 to 12% p.a. since 2017, albeit on platform level. With FMPP, LenDenClub aims to meet the proposition on individual level.

FMPP, a medium-term investment plan, has been uniquely devised to work on the principle of hyper-diversification. The investment funds are allocated to individual borrowers as low as ₹1. If not for hyper-diversification, instances of non-repayment from individual borrowers in other P2P plans can disbalance investments of individual investors. Therefore, with FMPP, LenDenClub offers Marginalised NPA through Systematic Risk Mitigation.

With FMPP, LenDenClub has made the end-to-end process of on-boarding borrowers to allocation of funds fully digital. Hence, unlike some P2P plans, investing in FMPP does not require manual, tedious processes. Having said that, LenDenClub does have a two-checkpoint policy in on-boarding its borrowers. It on-boards Credit Bureau-verified borrowers who are then screened over 200+ verification points for further establishing their creditworthiness.

When it comes to an optimum investment solution, FMPP, due to its well-balanced nature, can be used for portfolio diversification; it can also be used as a one-size-fits-all investment avenue.

With the starting amount of ₹10,000 with the flexibility of having multiple plans, FMPP Peer to peer has been designed for convenience as well as serious investments.

Conclusion

FMPP is the new-age solution for investments. Due to its well-balanced nature, it can be great for portfolio diversification. It can be used as a one-point investment solution too. Due to its robust AI- and ML-enabled nature, it also offers hassle-free investment experience. In short, FMPP is a complete investment solution.

*On platform level.

*P2P investment is subject to risks. And investment decisions taken by a lender on the basis of this information are at the discretion of the lender, and LenDenClub does not guarantee that the loan amount will be recovered from the borrower.

Related post

Leave A Comment