JM Financial has launched a new Fixed Maturity Plan (FMP) mutual fund, with the objective of generating regular returns through investments in fixed income securities, maturing on or before the maturity date of the scheme (375 days).
| Name | JM Fixed Maturity Fund Series XVI (Growth & Dividend) |
| Dates | Opens : September 29 Closes: October 27 |
| Duration | 375 days |
| Minimum Investment | Rs 5000/- (retail plan) |
| Redemption | Early redemption via stock exchanges. |
| Listing | NSE & Other stock exchanges |
| Holdings | Short term debt securities: upto 100% Government securities/money market instruments : 0% – 100% Can invest in AAA/AA+/AA/AA-/A+/A/A-/BBB+/BBB related paper. |
| Load | Entry Load : None. Exit Load : None. |
| Expense Ratio | upto 2.25% |
| Additional Information | Information Brochure |
| Benefits | Gains are taxed at lower rates, compared to fixed deposits. Offers diversification, compared to single company FDs. Has the potential to offer higher returns over bank FDs, as FMPs can invest in corporate debt. |
| Disadvantages | FMPs do not provide guidance on potential returns. |
| NRI investments | NRIs can invest on a fully-repatriable basis. |
| Where to apply | Contact your broker or the fund house for an application form. |
Our take: As with any FMP, the returns are unknown. The fund may not be able to match fixed deposit rates of 10-12%, which is currently offered by some private issuers. The expenses are high and will eat into returns.
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