New Delhi: Now, a mutual fund that will protect your invested capital through the thick and thin of the stocks market.
The Mutual Fund industry, which has grown leaps and bounds in the past few years, are all set to brings in these sophisticated capital protection funds, which is gaining popularity as it provides guarantee of at least the amount invested.
"The MFs will launch more sophisticated capital protection fund in the next six month to one year time," A P Kurian, Chairman of Association of Mutual Fund in India, told journalists in Mumbai on Tuesday.
The capital protection fund, that assured investors of guaranteed return of their money invested in mutual fund, has only two schemes in the market at president - UTI Mutual fund and Franklin Templeton Mutual Fund - which were launched after the SEBI guidelines were announced.
Besides these, MFs will soon launch more sophisticated schemes, which were being worked out by AMFI and Crisil, Kurian said.
Capital protection fund protects investors' money from ups and downs in the equity market by investing a part of the fund in safer investment instruments like government securities.
It allows traditional investors an option to take advantage from the upside in the market while assuring returns by investing in high quality fixed income securities, Kurian said.
While Franklin Templeton's capital protection scheme, which was the first to be launched in India, closed on November 30, a similar product from UTI MF was currently on and would close on January 25. Under these two schemes, 70-80 per cent funds will be invested in government securities and the remaining in equity markets.
It is, however, too early to say how people have taken to the two funds as the process was still being completed, Kurian said. Investors going for these close-ended schemes, however, remain to be invested for the stipulated period of time for protection of their capital money.
(With PTI inputs)
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