How to Choose the Right Mutual Funds to Pledge for Safer Borrowing

Entrepreneurs can manage uneven revenue cycles without costly unsecured loans.

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How to Choose the Right Mutual Funds to Pledge for Safer Borrowing

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How to Choose the Right Mutual Funds to Pledge for Safer Borrowing
Entrepreneurs can manage uneven revenue cycles without costly unsecured loans.
For safety, pledge Multi-asset or Balanced Advantage Funds. These have built-in hedging that reduces "Drawdown." Avoid pledging Sectoral, Small-cap, or Thematic funds; their high volatility makes them poor collateral. A "Safety First" portfolio for LAMF in 2026 consists of 60% Index Funds and 40% Short-term Debt Funds, providing a stable collateral base that satisfies lender requirements while minimizing the risk of forced sales during turbulence.
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