PSU Bank Launches Inflation-Beating Mutual Fund Scheme For Children; Start SIPs Of Rs 500 Weekly

Mutual funds are one of the best, smooth and convenient methods for middle-income group individuals to invest and gain financial stability for the long term. It allows the general population to be a part of the financial markets and ensures they reap the fruits of the growing economy, along with the business class. There are numerous mutual fund options for the public to invest either once or periodically to gain more returns than bank deposits especially hedging against inflation.

Union Children's Fund is a mutual fund scheme started by Union Bank of India (Public Sector Bank) in association with Dai-ichi Life Holdings, Japan. The subscription for the scheme is open from November 28, 2023 till December 12, 2023. The scheme is specifically tailored for young parents who understand the importance of maintaining financial security for their kid's bright future ahead.

This mutual fund product matches with the expectations of investors seeking long-term capital appreciation. The fund has a mixture of equity holdings and equities related to securities and debt instruments, with a high-risk portfolio, same as the benchmark S&P BSE 500 Index. Since the term for mutual fund remains long, a high-risk portfolio mutual fund would deliver higher returns with a compounding effect.

The Chief Executive Officer (CEO) of Union AMC, Mr. G. Pradeepkumar in his official statement expresses, "We are excited to announce the launch of Union Children's Fund. At a time when inflation is on the rise, it has become challenging for people to invest in their children's future needs. In this scenario, imagine a future where each child's dreams have no limits, where his/her potential is nurtured, and where every milestone is supported with unwavering love and financial well-being. That's exactly what Union Children's Fund aims for - to help you plan for your child's bright future. This investment can be a tangible expression of your love and commitment towards your child."

As the name suggests the fund is an open-ended fund, focused exclusively on investments for children, which would have a lock-in period of five years or till the child ages to become an adult, whichever is earlier. The official documents submitted by the fund managers exclaim that the investment objective of the scheme is to generate long-term capital appreciation with a diversified portfolio and various plans for investors to commence their funding.

The minimum application amount for a one-time investment is Rs. 1,000/- and in multiples of Re. 1/- thereafter. Investors can also begin with a Systematic Investment Plan of Rs. 500/- for weekly payments, Rs. 1000/- for monthly investments and Rs. 5000/- for quarterly investments. However, redemption and switch-out are not applicable until the maturity or lock-in period of the fund is attained or the unit holder (beneficiary child) comes of age. Once the lock-in period ends, the amount accumulated in the fund can be moved to other schemes and plans according to the needs of the unit holder. The redemption would be transferred to unit holders within three working days from the date of redemption or repurchase.

Apart from the Union Children's Fund, other fund schemes such as SBI Magnum Children's Benefit Fund, Tata Young Citizen Fund, HDFC Children's Gift Fund, ICICI Pru Child Care Fund, UTI-CCF Investment plan, etc. are also available for parents seeking better investment options allowing consistent funding for long term.