Fixed Maturity Plans (FMP MF) stage a comeback

November 5, 2009 by  

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Fixed Maturity Plans (FMP Mutual Funds) are the rage in the mutual fund NFO market

return of fmp (fixed maturity plans)Just some time back, FMP new fund offers had virtually vanished. After the debacle in FMP mutual funds last year, fixed maturity plans had been shunned by high individuals (HNIs), retail and institutional investors in India

Fixed Maturity Plans (or FMP mutual funds) new fund offers have returned in huge numbers

New Fixed Maturity Plans (FMP new fund offers) have been launched by ICICI Prudential Mutual Fund, HDFC Mutual Fund, Fortis Investments, JM Financial and Tata Mutual Fund in the last month. Per sources, the response to these FMP MFs (fixed maturity plan mutual funds) has been excellent from institutional, corporate and retail investors

Recently launched FMP MFs (fixed maturity plan mutual fund offers) may offer lower returns than last year but the returns will be more secure

New FMP MF NFOs will probably offer lower return than the fixed maturity plans offered by mutual funds last year, but there is really no estimated return. However, the recent SEBI regulations regarding FMP Mutual Funds have ensured that the investments in fixed maturity plans are more secure. There seems to be little chance of the disaster that almost hit mutual funds that dealt with FMP products last year

Revived interest in FMP Fixed Maturity Plan New Fund Offers by India Mutual Funds – SEBI deserves a major portion of the credit

SEBI definitely took steps in the right direction with regulations to rein in rampant FMP NFOs that invested in risky debt portfolios in the search of the elusive higher yields. With SEBI ‘s new reforms, there are strict restrictions and disclosures needed from MFs in India launching Fixed Maturity Plan (FMP) new fund offers (NFOs).

Are FMP Fixed Maturity Plans from Indian Mutual Funds such as ICICI Prudential, HDFC,Fortis & Tata Mutual Fund liquid anymore?

Liquidity in FMP Fixed Maturity Plan Mutual Funds? Absolutely not! Though SEBI insists on having the FMP listed on the exchanges as a debt fund, not too many trades are taking place in FMP funds.

However, liquidity is not the only criteria for FMP investors- the improvement in the quality of investments by FMP MFs has drawn retail, institutional investors back to Fixed Maturity Plans

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