CPPI means Constant Portfolio Protection Insurance. CPPI is a more refined / advanced version of a simple capital protection strategy that is usually adopted in Capital Protection Oriented funds that we see in the market. It's aim is to try and maximise the upside from the portfolio, while sticking to the basic principle of downside protection that is a necessary feature in any capital protection strategy. Simple capital protection strategies limit the downside - and the upside too In a simple capital protection strategy for say a 3 year period, for every 100 rupees of corpus, the fund manager will typically buy around Rs. 75 worth of G-Secs, which over a 3 year period would grow to Rs.100, with the help of accrued interest. This 75 guarantees that the capital value at the end of 3 years will not fall below 100. With this comfort, the balance 25 is typically deployed in equities, with an expectation of beating fixed income returns over the next 3 years and thus delivering an over...