Tata Mutual Fund has introduced two Fixed Maturity Plans (FMPs) with tenures of 91 and 364 days. These schemes provide investors with an opportunity to participate in debt instruments while minimising interest rate risk, the fund house said.
The
new fund offer (NFO) of the newly launched plans, Tata Fixed Maturity Plan Series 61 Scheme A (91 days) and Tata Fixed Maturity Plan Series 61 Scheme B (364 days), is open for subscription until March 11.
Tata Fixed Maturity Plan Series 61 Scheme A (91 days) is designed to generate income and/or capital appreciation by investing in fixed-income instruments aligned with the scheme's tenure.
It falls under the category of a close-ended debt scheme, offering relatively low-interest rate risk and moderate credit risk.
The scheme has a minimum subscription amount of ₹5,000 and subsequent multiples of ₹1.
The NAVs will be calculated and disclosed within 5 business days from the allotment date.
The scheme provides various investment options, including Growth and Income Distribution cum capital withdrawal option (IDCW) under both Regular and Direct Plans,
Tata Mutual Fund said.
Tata Fixed Maturity Plan Series 61 Scheme B (364 days) shares a similar objective, aiming to generate income and/or capital appreciation through investments in fixed-income instruments with maturities aligned with the scheme's tenure.
As a close-ended debt scheme, it also presents relatively low-interest rate risk and moderate credit risk.
The scheme maintains a minimum subscription amount of ₹5,000 and subsequent multiples of ₹1.
Like scheme A, NAVs will be disclosed within five business days from the allotment date.
Investors can choose between Growth and Income Distribution cum capital withdrawal option (IDCW) under both Regular and Direct Plans.
A look at returns of similar funds
| Scheme Name | 1-Year Return | 2-Year Return |
|---|
| Nippon India Fixed Horizon Fund XLI - Series 8 - Direct Plan - Growth | 8.78% | 6.53% |
| Bandhan Fixed Term Plan - Series 179 - Direct Plan - Growth | 8.82% | 6.40% |
| SBI Fixed Maturity Plan (FMP) - Series 1 - Direct Plan - Growth | 8.80% | 6.53% |
| ICICI Prudential FMP - Series 85 - 10 Years Plan I - Direct Plan - Growth | 8.74% | 6.40% |
| SBI Fixed Maturity Plan (FMP) - Series 58 - Direct Plan - Growth | 8.15% | 5.37% |
| SBI Fixed Maturity Plan (FMP) - Series 58 - Direct Plan - Growth | 8.15% | 5.37% |
| SBI Fixed Maturity Plan (FMP) - Series 6 - Direct Plan - Growth | 8.60% | 6.33% |
(Source: Moneycontrol)
Should one invest?
The low interest rate risk and moderate credit risk make it suitable for risk-averse individuals.
However, FMPs are close-ended funds with a fixed maturity period, and exit before maturity may result in liquidity challenges. If an investor requires flexibility and liquidity, other investment options like open-ended funds might be more suitable, experts say.
Investors should carefully consider their financial goals and risk tolerance before making any investment decisions.
