Skip to main content

IDFC CAPITAL PROTECTION ORIENTED FUND SERIES 1

Product Isn't As Liquid As Fixed Deposits, Exit Is Only Through Stock Exchange Where Liquidity Is Uncertain




THERE is a class of investors who are unhappy with fixed deposit rates but do not want to take chances with their capital. It is keeping such investors in mind that IDFC Mutual Fund has launched the first in its series of capital protection-oriented funds. These funds allow a conservative investor to participate in equity markets, while at the same time the asset allocation is such that investor capital is protected at all times.

THE FUND

IDFC Capital Protection Oriented Fund (Series 1) is a closed-ended mutual fund that seeks to protect capital by investing in high-quality fixed income instruments which mature at the same time as the scheme. It will also seek capital appreciation by investing in equity and equity-related instruments. The tenure of the fund is 36 months.

INVESTMENT STRATEGY


The fund manager will invest between 84% and 100% of the invested funds in highquality debt instruments. This investment will grow over 36 months of the total initial investment you made in the fund at the time of its inception. The remaining 0-16% of amount will be invested in equities. The strategy ensures that you get your capital back whatever happens with equity investments. This way the fund aims to offer you an opportunity to invest in equities without risking your entire investment.


TARGET AUDIENCE

Clearly, the target is traditional fixed income investors. The only difference between a fixed deposit and such a fund is that returns on fixed deposit are known to investors at the time of investing. However, in case of this fund, the returns are not known in advance, though investors can expect a return of capital.

TAXATION

On the taxation aspect, the fund is a sure shot winner. The fund scores over a fixed deposit as the returns earned in this product are taxed at lower of 10.3% without indexation, or 20.6% with indexation like a debt mutual fund, whereas the fixed deposit returns are taxed at 30.9%.

SAFETY


The fund is rated AAA (SO) by CRISIL. The rating only indicates highest degree of certainty regarding payment of face value of investment to unit holders on the maturity. The rating does not indicate any stability of NAV before maturity. A point to note is that the rating is not a guarantee that investors will get their money back.

FUND DETAILS


The minimum investment has been fixed at Rs 5,000. The scheme has growth and dividend options. Benchmark for the scheme is CRISIL MIP blended index. Ashwin Patni is the fund manager to the scheme. There is no entry or exit load. The scheme being a closed-ended scheme, the only exit is through the stock exchange where liquidity is low. As such, there is no guaranteed exit at NAV before the maturity date. The new fund offer closes on March 24, 2010.

WHY INVEST:

To invest in equities to earn higher returns over traditional fixed deposits without risking your capital.

WHY NOT INVEST:

The product is illiquid. Being close-ended structure, it reduces the probability of exit at NAV since the only exit is through stock exchange, where liquidity is uncertain.

 


Popular posts from this blog

SBI Magnum Tax Gain Scheme 1993 Applcation Form

    https://sites.google.com/site/mutualfundapplications/tax-saving-mutual-funds-elss     Investment Details Basics Min Investment (Rs) 500 Subsequent Investment (Rs) 500 Min Withdrawal (Rs) -- Min Balance -- Pricing Method Forward Purchase Cut-off Time (hrs) 15 Redemption Cut-off Time (hrs) 15 Redemption Time (days) -- Lock-in 1095 days Cheque Writing -- Systematic Investment Plan SIP Yes Initial Investment (Rs) -- Additional Investment (Rs) 500 No of Cheques 12 Note Monthly investment of Rs 1000 for 6 months and quarterly investment of Rs 1500 for 4 quarters.

Birla Sun Life Tax Plan Online

Invest Birla Sun Life Tax Plan Online   An Open-ended Equity Linked Savings Scheme (ELSS) with the objective to achieve long-term growth of capital along with income tax relief for investment.   After a bad patch from 2008 to 2010, Birla Sun Life Tax Plan has made a big comeback in the last five years, with a particularly good run since 2014. The fund's rankings, which had slipped to two stars in 2011-12, recovered sharply to three-four stars in the last three years. The fund has delivered a particularly large outperformance over its benchmark and peers in the last couple of years. The fund's investment strategy focuses on a diversified and high-quality portfolio, with parameters such as capital ratios and balance-sheet strength used to judge quality. It uses a combination of top-down and bottom-up approaches to take sector/stock positions. The fund avoids highly leveraged plays. Staying more or less fully invested at all times, the fund parks roughly half of its portfoli

Should you Roll Over 1 year Fixed Maturity Plans?

The period between January and March typically sees an uptick in the launch of fixed maturity plans, or FMPs. Not this year. Instead, fund houses are busy rolling over or extending the tenure of their one- year FMPs launched last year to three years. Investors in one- year FMPs have a choice. Either redeem units or roll over to three years. If you exit now, your gains will be added to your income and taxed in line with your individual slab rate of 10, 20 or 30 per cent. If you stay invested for two more years, you pay 20 per cent tax with indexation benefit. Yields have softened in the past few months on expectations of a rate cut. If the central bank continues its soft monetary stance, yields are likely to fall further. In such a scenario, it makes sense for investors, particularly those in the 30 per cent tax bracket, to roll over their investments and lock in at a higher yield now. In a surprise move, the Reserve Bank of India cut repo rate by 25 basis

Mutual Fund Review: IDFC Premier Equity Fund

  IDFC Premier Equity Fund, which falls under the presumed high risk group of mid- and small-cap schemes, can rely on astute and timely equity picks. These make it less vulnerable to fluctuations compared with others in the category   IDFC Premier Equity Fund is designed to invest in upcoming, but promising businesses available at cheap valuations, and hold on to these businesses until they reap desired returns. The experiment has been successful so far, and IDFC Premier Equity has emerged as one of the top performing mutual fund schemes in the mid- and smallcap category of equity schemes.    While the scheme is an open-ended equity fund, i.e. open for subscriptions throughout the year, it has a unique philosophy to limit fresh inflows. Thus, while an investor can always take the systematic investment plan ( SIP ) route to invest in the scheme throughout the year, inflows through a lumpsum investment have been restricted. Since inception, IDFC Premier Equity has been opened for l

IDFC Premier Equity Fund dividend

  IDFC Mutual Fund   has announced dividend under the dividend option of   IDFC Premier Equity Fund Direct-D . The quantum of dividend shall be   R 4.3464 per unit.   The record date has been fixed as May 06, 2015. Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015 1. ICICI Prudential Tax Plan 2. Reliance Tax Saver (ELSS) Fund 3. HDFC TaxSaver 4. DSP BlackRock Tax Saver Fund 5. Religare Tax Plan 6. Franklin India TaxShield 7. Canara Robeco Equity Tax Saver 8. IDFC Tax Advantage (ELSS) Fund 9. Axis Tax Saver Fund 10. BNP Paribas Long Term Equity Fund You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds Invest in Tax Saver Mutual Funds Online - Invest Online Download Application Forms For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call --------------------------------------------- Leave your comment with mail ID and we will answer them OR You can write to us at PrajnaCapital [at] Gmail [dot]
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now