A parent's first concern is funding his child's education. One of the key financial goals for all parents is to accumulate an adequate corpus for their children's higher education. Failure to attain any other objective, such as a foreign trip, may make you unhappy for a while, but failing to give appropriate financial assistance for your child's further education can be heartbreaking and a lifetime regret.
Children's Gift Funds are mutual fund plans that provide financial benefits to your children for things like wedding expenses, future school fees, and so on. This results in long-term capital growth and is classified as a Hybrid Fund or a Balanced Mutual Fund. Gift funds invest in both debt and equity securities. Fixed Income Securities are a type of debt instrument, while shares are a type of equity.
SBI Magnum Childrens Benefit Fund
SBI Mutual Fund's SBI Magnum Children's Benefit Fund - Investment Plan Direct - Growth is an Aggressive Hybrid mutual fund plan. It is a medium-sized fund in its category, with Rs 151 crores in assets under management (AUM) as of 30 June 2021. The fund's expense ratio is 1.01 percent, which is comparable to the expense ratios charged by most other Aggressive Hybrid funds.
The financial, automobile, chemical, services, and metals industries make up the majority of the fund's equity holdings. GOI, Muthoot Finance Ltd., Laxmi Organic Industries Ltd., Powergrid Infrastructure Investment Trust, and Catholic Syrian Bank Ltd. are the fund's top five holdings. The primary index for the Investment Plan is the CRISIL Hybrid 35+65 - Aggressive Index.
UTI CCF Investment Plan
UTI CCF- Investment Plan is a UTI Mutual Fund Solution-Oriented - Children's Fund fund. It has a market capitalization of Rs 504.40 crore. The UTI CCF- Investment Plan is benchmarked against the CRISIL Balanced Fund - Aggressive Index as the principal index, as well as the NIFTY 50 - TRI and NIFTY 500. The top 3 holdings of the fund are Infosys, HDFC and ICICI Bank. The recent one-year growth returns on the UTI Children's Career Fund-Investment Plan Regular Plan are 56.79 percent. It has generated an average yearly return of 10.31% since its inception. The majority of the money in the fund is invested in the financial, technology, services, FMCG, and automobile industries. For July 7, 2021, the NAV of UTI Children's Career Fund-Investment Plan is 55.13.
HDFC Children's Gift Fund
HDFC Children's Gift Fund Direct Plan is a medium-sized fund in its category, with assets under management (AUM) of 4,667 crores. The cost ratio of the fund is 1.09 percent. The fund now has a 67.10 percent stock allocation and a 19.07 percent debt allocation.
The 1-year returns on the HDFC Children's Gift Fund Direct Plan are 48.06 percent. It has produced an average yearly return of 16.44% since its inception. The NIFTY 50 - TRI as the primary index and the NIFTY 50 Hybrid Composite Debt 65:35 Index as the secondary index are used to measure HDFC Children's Gift Fund.
Axis Childrens Gift Fund - No Lock-in
Axis Children's Gift Fund is an Axis Mutual Fund Solution-Oriented - Children's Fund fund. It has a market capitalization of Rs 607.91 crore. The NIFTY 50 - TRI index is used as the primary index, and the NIFTY 50 Hybrid Composite Debt 65:35 Index is used as the secondary index. The Financial, Technology, Automobile, Services, and Chemicals sectors make up the majority of the fund's equity holdings. If you redeem within 365 days, you'll get a 3% bonus. Between 366 and 730 days, redemption rates are 2%. Between 731 and 1095 days, there is a 1% chance of redemption.
LIC MF Childrens Fund
The fund has a 1.41 percent expense ratio, which is higher than most other Balanced Hybrid funds. The fund currently has an equity allocation of 88.16 percent and a debt exposure of 10.87 percent.
The returns on the LIC MF Children's Gift Fund Direct-Growth Fund over the last year have been 33.91 percent. It has returned an average of 10.50 percent every year since its inception. GOI, HDFC Bank Ltd., ICICI Bank Ltd., Infosys Ltd., and Tata Consultancy Services Ltd. are the fund's top five holdings. The equity part of the fund is predominantly invested in the financial, technology, fast-moving consumer goods, healthcare, and energy sectors. It has delivered average annual returns of 10.5% since inception.
Mutual Funds For Child's Education With SIP Investment
|Fund name||1 year||5 year||YTD|
|SBI Magnum Children's Benefit Fund||New fund||New fund||39.31%|
|UTI CCF- Investment Plan||59.04%||14.67%||19.15%|
|HDFC Childrens Gift Investment Plan||48.06%||16.02%||19.03%|
|Axis Childrens Gift Fund - No Lock-in||37.82%||14.54%||11.91%|
|LIC MF Childrens Fund||33.91%||8.52%||7.95%|
Why You Should Consider Mutual Funds For Child Education?
You must select an investment that provides a return that is higher than inflation over a period of time. Invest your money according to your risk appetite to build up a fund for your child's higher education. To save money for your child's higher education, you can use a relatively safe financial vehicle like the PPF or the NSC. An aggressive investor, on the other hand, may choose to invest in equity-oriented ventures with a high long-term return on investment. You should figure out how much money you'll need for the child's college as soon as possible. It allows you to choose the best investment and save the funds needed to send your child overseas for higher education. Equities mutual funds are a good option. Over time, mutual fund investments provide far superior returns than any other type of savings. The returns are better if the time horizon is longer than ten years.You won't have to stress over which stocks to buy or when to acquire them. For a nominal price, a professional fund manager will handle all of these tasks for you.
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