Mutual Fund Corner: Pros and cons of investing in fixed maturity plans

In this latest episode of Mutual Fund Corners, Prableen Bajpai, Founder at Finfix Research & Analytics; and DP Singh, Deputy Managing Director and Chief Business Officer at SBI MF discuss fixed maturity plans (FMPs).

Bajpai said, “There are lot of benefits to FMPs. Lower costs versus regular debt funds around same maturity, predictability of returns, interest rate risk is negated by buy and hold strategy, tax efficiency and the lock-in helps to maintain discipline.”

Singh said, “How FMP works is that we collect the money from investors and lock in the money in the similar period for which the money has been raised in those securities and the expense ratios are generally very, very low in these kinds of funds. So, we are able to provide very, very good returns to the investor in FMPs.”

Watch video for more.

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