Capital protection mutual funds
The latest mantra of the day in the Indian Mutual Fund markets is the promise of capital protection. Though almost all funds give better returns compared, capital protection is not guaranteed. Of course, few schemes even from popular fund houses have given negative returns too. This, of course, rarely happens and even in such cases, the scheme will recover over a period of time and give positive returns.
Capital protection schemes from mutual fund houses guarantee the protection of capital because a major chunk (upto 80% in most case) of it goes into debt and other fixed income securities which in many cases is very risk free and gives assured returns. The remaining 20% is put into equities to bring capital appreciation. This ratio coupled with the availability of time ensures that the capital employed is always protection.
Here is a partial list of schemes from some of the major fund houses which have already come up or are planning to come with capital protection schemes.
Birla Sunlife Secure Capital Plus
Franklin Templeton Capital Safety
HDFC Capital Guard – Series 1
HSBC Capital Protection Series
Pru ICICI Capital Protection Orientation Scheme Series I
Reliance Capital Protection Fund
SBI Capital Protection Fund Series I
Tata Capital Safety Fund
UTI Capital Protection
Most of these scheme take up a period of 3 years to bring in a decent returns. So do keep an eye on the performance of these schemes
Add commentFebruary 20th, 2007