HDFC MF launches 92 Days FMP – Review

Written by: Monika Nihalani

HDFC MF launches 92 Days FMP – Review
HDFC Mutual Fund has launched a new Fixed Maturity Plan (FMP), short-term investment plan named as HDFC Fixed Maturity Plan 92 Days November 2011 (1), under HDFC Fixed Maturity Plans - Series XIX. It's a close-ended income scheme with the duration of 92 days.

Investment Objective:
The investment objective of the plan is to generate regular income through investments in debt / money market instruments and government securities maturing on or before the maturity date of the plan.

The fund seeks to collect a minimum subscription (minimum target) amount of Rs 1 crore under the scheme during the NFO period.

Allocation of Funds:
The scheme would invest 60% to 100% of assets in debt & money market instruments including securitized debt with low to medium risk profile. The scheme may invest up to 40% of net assets in money market instruments and government securities with low risk profile.

Basic Details:
NFO Opens: November 17, 2011
NFO Closes: November 21, 2011
NFO Price: Rs.10 per unit
Options: Growth and Dividend Payout
Minimum Application Amount: Rs 5,000 per application and additional of Rs 10, thereafter
Exit Load: Nil
Benchmark: CRISIL Short Term Bond Fund Index
Fund Manager: Mr Bharat Pareek

View: Looking at the recent inflation figures, it seems apparently unfeasible for the Reserve Bank of India (RBI) to lower down key policy rates. In the rising rate scenario, short-term debt funds are the better option to invest than keeping an idle cash in bank accounts as the returns offered by these debt funds are slightly higher than the savings rates.

The fund would primarily invest in Money Market Instruments or Government Debt securities. And as per the data provided in Mint Money, the current yield on Certificates of Deposits (CD) for one month is around 8.95% and CD yield for three months is around 9.3%.

So, this provides you a good option to invest if you can lock your money for three-months. DISCLAIMER: The views expressed in this article are the views of the author and do not reflect the views of our company. does not take any responsibility for any losses incurred by investors who take their cues from the above article.

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