DSP Blackrock Series 123 : New FMP Offer : October 2013 : Summary
The wave of new FMP offers continues with another FMP from DSP Blackrock. The FMP has a maturity of 12 months, thereby qualifying for indexation benefits. DSP Blackrock is a well respected mutual fund with tremendous experience in debt mutual funds
DSP Blackrock Series 123 : FMP offer timelines
- FMP Offer opening date : 9th October
- FMP Offer closing date : 14th October
DSP Blackrock Series 123 : Maturity dates of this FMP
This FMP from the DSP Blackrock stable has a maturity of 12 months. Since the duration of this FMP extends beyond March 31 2014, it does qualify for indexation tax benefits
DSP Blackrock Series 123 : Entry and exit loads of this fixed maturity plan offer
- Entry Load : There is no entry load for this FMP offer
- Exit Load : There is no exit load since , per SEBI guidelines, this FMP is listed on the stock exchange
Should you invest in DSP Blackrock Series 123 new FMP offer
One definitely recommends reading the fmp offer document before investing.
FMPs (Fixed Maturity Plans) are a good option, if you are an Indian, you are wondering where to invest in India today
Why consider FMPs or Fixed Maturity Plans :
- The equity or share market has crashed
- The debt market has crashed
- Fixed deposits (FDs) have poor post tax returns
- You fear the risk of default with corporate FDs
- The solution : Invest in FMPs or Fixed Maturity Plans!
5 Reasons to invest in FMPs (Fixed Maturity Plans)
The equity market is a poor alternative to FMP investments today
The crash in the equity (share) market has all of us scared. Is there more pain in the market? Will it ever recover? Will interest rates ever decrease? The NIFTY is now heading towards 5000, FIIs are exiting. On top of these factors, there are rumours of a pending strike on Syria. The high cost of capital in India suggests that the economy will not revive soon and the equity share market will be in doldrums for some time. So, equities are out as an investment option. Even if they are up temporarily, the QE abandonement by the US Fed hangs like a damocles sword on the market. Fixed Maturity Plans are the option to consider.
FMP vs debt mutual funds : A no-brainer
Earlier in the year, as predictions of lower interest rates hit the market, everyone wanted to get into the debt market. However, after rumours started coming in of quantitative easing being eased out by the US Government, there has been a drastic pullout of FIIs from the debt market. This has led to debt funds or gilt funds not being an option anymore for Indian investors
FMPs Mutual Funds investments are less affected by FII impacts due to reducing QE- quantitative easing
Now, we come to FMPs or Fixed Maturity Plans. These are special debt NFOs (new fund offers) offered by mutual funds. However, whats unique about FMPs is that FMP Mutual Fund investments are for a specific duration. This ensures that the mutual fund managers can lock in to the high interest rates available now and the indicative yields are usually accurate. For example, if you buy a FMP fixed maturity plan mutual fund for 6 months, the mutual fund manager will typically invest in fixed income instruments of that known maturity. This essentially reduces interest rate risk significantly. As FMPs do not work like debt mutual funds, they are not affected by sudden withdrawls in the funds
FMPs, being illiquid, are actually an advantage during this time
FMPs (Fixed Maturity Plans) are supposedly liquid debt instruments per RBI and are traded in the debt market. But in reality, not much trading takes place in FMPs. This is actually an advantage in today’s debt market since fixed maturity plans are not subject to the fickle investment decisions of global FIIs. Debt mutual funds barring fixed maturity plans have totally collapsed, but FMP investments are still doing well
Fixed Maturity Plans (FMPs) have tax advantages over FDs and other investments through indexation
The tax advantages of FMPs over FDs is well documented. The indexation benefits of FMPs are great especially if the fixed maturity plans span across multiple years. This is a great advantage for Indian investors in the 20% or 30% tax brackets and helps them save a lot of tax
In summary, fixed maturity plans are the way to go these days, however, always watch the fine print!
While Fixed Maturity Plans may be preferred investment vehicles with mutual funds launching a new one every day, you have to make sure that you read the prospectus and invest in FMPs that invest in AAA or AA rated securities only and also look at the past performances of the individual mutual fund managers
The right time to invest in FMPs – before interest rates fall
The best part of FMP Mutual Fund investment schemes is that fund managers are able to lock in high interest rates when the funds are launched. This is because in fixed maturity plans, the fund managers lock in the right mix of Govt Securities and corporate debt at the right maturities depending on the maturity of the FMP scheme
Interest rates are set to fall – lock in FMP investments now
The point in favour of FMP investments is that all indications from the RBI suggest that the RBI is set to cut interest rates now. This means that future FMP investments may not get you the same returns that an investment in fixed maturity plans will get you today.
Will interest rates really fall? That question is debatable and definitely depends on the trends in inflation, driven by commodity prices- which is not really in RBI’s control
If you believe in fixed maturity plan investments, this is definitely the right time.
FMPs also offer tax benefits in comparison to other investments
While it is a good time to lock in FD (fixed deposit) rates as well, FMPs score over FDs in terms of tax benefits.As a result, unless you need the high liquidity benefits offered by bank fixed deposits (FDs), fixed maturity plans are a better option at this point, especially if you fall into the tax brackets
Why FMP returns in 2012 and 2013 have made FMPs the preferred debt fund investment in 2013
|FMP returns in 2012 have been really good- in many cases, the returns from FMP investments have beaten debt fund benchmarks. No wonder that FMPs form the highest category of mutual fund NFOs in 2012 and 2013|
I myself invested in a 370 day FMP last year and this FMP has given returns of over 12% in 2012. These returns are obviously better than most investment in debt mutual funds in 2012
Investors in FMPs NFOs in 2012 need to thank SEBI for the excellent returns that most FMP mutual fund NFOs have returned
SEBI came up with far reaching reforms in FMP NFOs launched by Indian mutual funds and this has led to more transparency and reduced risks in FMP investment returns.
The delay/abandonement of the Direct Tax Code has resulted in continued tax benefits for FMP investments and higher post-tax returns.
The tax benefits of FMP returns due to the FMP tax treatment advantages and related single and double indexation benefits have resulted in superior FMP post-tax returns in 2012 and 2013
We are all aware of the supaerior returns of FMPs vs FDs, purely due to the indexation benefits of FMP investments.
Have you ever wondered why returns from FMP investments do better than comparable debt fund investments?
It is really not all surprising that FMP returns do better than FDs, but FMPs often do better than debt fund / fixed income investments such as income debt funds, floating rate funds and other debt funds. This is because FMPs enable the mutual fund to lock into higher interest rates since there is less chance of withdrawl despite being listed. In a falling interest rate scenario, this enables mutual fund managers to lock into higher interest rates. In addition, investors in FMPs get the benefits of better post tax returns due to indexation benefits.
Perfect time to invest in FMP Fixed Maturity Plan NFOs from mutual funds
Investing in any mutual fund NFO is fraught with risk these days- is there a ray of hope in investing in fixed maturity plans? Yes! FMP New Fund Offers from Indian mutual funds are a good option for investments these days
Why can one consider FMP (fixed maturity plan) investments at this time? Why now?
Consider the current stock market and interest rate scenario
- Stock markets at an intermediate high, with the sensex at around 18000 and stock markets likely to fall.
- Interest rates are a high and the rates are set to fall soon. So, its a perfect time to lock into these high rates
- FMPs are better than bank fixed deposits in terms of tax treatment for HNIs and retail investors
- Fixed Maturity Plans from mutual funds offer the opportunity to buy a basket of fixed maturity debt securities,rather than a single corporate fixed deposit
- Longer term FMP investments offer great tax benefits with prospects for single and double indexation tax benefits
- With falling food inflation, it is likely that interest rates will fall soon. The RBI and the Indian Government are also giving similar messages leading to a possible fall in interest rates. Its the right time to lock into these higher rates
- SEBI has tightened the governance of fixed maturity plans by Indian mutual funds by mandating that FMPs be traded in the stock market. Also, the fact sheet published by Indian mutual funds have ensured that if you can study the past performance as well as the expense ratios of FMP NFOs. This has led to more transparency in FMP investments.
In short, this is the right time to invest in FMP mutual funds- Invest soon before the opportunity window for fixed maturity plans disappear
Birla Sunlife mutual fund has launched a new FMP NFO- Series DD- Should you invest?
FMP NFOs are a dime a dozen these days. The first question to ask is whether this particular FMP NFO from Birla Sunlife Mutual Fund is worth investing. Lets dig into the details of Birla Sunlife MF Fixed Term Series DD
Open and close dates- Birla Sunlife MF Fixed Term Series DD
This new FMP NFO from Birla Sunlife Mutual Fund opens on May 26 and closes on June 06. This means that unlike many other FMP NFOs, this FMP gives you some time to mobilize funds, in case you are interested in investing
Maturity Period for Birla Sunlife Fixed Term Series DD NFO
Birla Sunlife Fixed Term Series DD has a maturity period of 367 days. This means that investors in this FMP NFO will be eligible for indexation benefits
Management expenses for Birla Sunlife Fixed Term Series DD FMP NFO
The total expense for this NFO is 2.25% per the prospectus. This is quite high for a fund that is benchmarked against the CRISIL short term bond index
You can take your call whether to invest in the Birla Sunlife Fixed Term Series DD NFO
If you need any more information about this Birla Sunlife Term Series DD, pls read the FMP NFO prospectus
Sundaram Mutual Fund has launched a new FMP NFO- The Sundaram Fixed Term Series AJ
Sundaram Mutual Fund has reiterated its focus on fixed maturity plans by launching a new fund offer (NFO) in the FMP category called the Sundaram Fixed Term Series AJ. The liquidity issues and the tax benefits are driving mutual funds to launch new FMP NFOs every day
Open and closing dates for Sundaram Mutual Fund Fixed Term Series AJ FMP NFO
- Open and close dates
- Open dates for Sundaram Mutual Fund Fixed Term Series AJ – 27 December
- Close dates for Sundaram Mutual Fund Fixed Term Series AJ – 7 January
Sundaram Mutual Fund Fixed Term Series AJ – Tenure
The tenure of Sundaram Mutual Fund Fixed Term series AJ is 24 months. What this means is that this fixed maturity plan will qualify for 2 years indexation benefits for tax purposes.
Final review – Sundaram Mutual Fund Fixed Term Series AJ
It is difficult to predict interest rates over the next 2 years and hence its quite tough to give a call on whether Sundaram Mutual Fund Fixed Term Series AJ is a good bet, since it implies locking in your capital for over 2 years. However, if you are looking at the option of investing in an FD instead of this FMP, and do not definitely need the capital for 2 years, it is recommended to invest in this FMP. (Read FMP vs FDs for tax benefits for more details)
Another FMP from Birla Sunlife Mutual Fund- Fixed Term Plan Series CK
Birla Sunlife Mutual Fund seems quite committed to launching new Fixed Maturity Plans of varied maturities. Fixed Term Plan Series CK is yet another FMP NFO in that category
Open and closing dates for Birla Sunlife Mutual Fund Fixed Term Plan Series CK
- Birla Sunlife Mutual Fund Fixed Term Plan Series CK
- Open date of Fixed Term Plan Series CK NFO issue : 30 December 2010
- Close date of Fixed Term Plan Series CK NFO issue : 6 January 2011
Birla Sunlife Mutual Fund Fixed Term Plan Series CK – maturity period of this FMP
The maturity period of Fixed Term Plan Series CK is 368 days. This means that the FMP will qualify for single indexation tax benefits
The final review- Birla Sunlife Fixed Term Plan Series CK
While Fixed Term Plan Series CK qualifies for single year indexation benefits for taxes, some may like to wait for other FMPs to be launched particularly at the end of the calendar year, that may allow for double indexation tax benefits
ICICI Prudential Fixed Maturity Plan Series 53 – 18 Months Plan A-Review
ICICI Prudential Mutual Fund has launched a new FMP – Series 53 18 Months Plan A. Due to the ongoing liquidity issues, this is another FMP among the spate of FMP issues that we are seeing in the market recently
Axis Mutual Fund launches a new FMP- Fixed Term Plan Series 2
|Axis Mutual Fund Fixed Term Plan Series 2 (371 days)|
Axis Mutual Fund Fixed Term Plan Series 2- FMP Open and close dates
Open and close dates for Axis Mutual Fund FMP-Fixed Term Plan Series 2
- Open date for Axis Mutual Fund FMP Fixed Term Series 2- 10 March 2010
- Close date for Axis Mutual Fund FMP Fixed Term Series 2- 18 March 2010
Axis Mutual Fund Fixed Term Series 2 FMP Duration
Axis Mutual Fund Fixed Term Series 2 FMP has a maturity of 371 days
Should you invest in Axis Mutual Fund Fixed Term Series 2 FMP (Fixed Maturity Plan)?
Since Axis Mutual Fund Fixed Term Series 2 FMP will list in the last week of March, it will have double indexation benefits and the tax advantages work in the favour of this FMP.
- Retail Investment FMP Option- Minimum investment Rs 10000
- High Investment FMP Option- Minimum investment Rs 25,00,000
- Super high Investment FMP Option- Minimum investment Rs 1,00,000,000
Entry, exit loads for Tata Fixed Maturity Plan Series 25
There are no entry and exit loads for Tata Fixed Maturity Plan Series 25- The FMP will be listed and tradeable on the exchange