Mirae Asset Mutual Fund announced the launch of the Mirae Asset Fixed Maturity Plan - Series V -Plan 1, a close-ended income scheme with an investment tenure of 91 days. The scheme opens for public subscription on February 08, 2023 and will close on February 13, 2023. The units would be allotted on February 14, 2023. The maturity date of the scheme is May 15, 2023.
Q. What kind of mutual fund scheme is this?
This is a kind of debt fund instrument that would generate income for the investors through investments in a portfolio comprising of debt and money market instruments maturing on or before the maturity of the scheme. However, there can be no assurance that the investment objective of the scheme would be achieved.
Q. What is the main objective of investing in this fund?
The investment objective of the scheme is to provide income to the investors through investments in a portfolio comprising of debt and money market instruments maturing on or before the maturity of the scheme. Since it’s a close-ended scheme the investor gets the benefit of knowing the intended portfolio allocation pre-hand.
As the scheme is close-ended in nature, the underlying investments are mostly held till maturity. Therefore, the scheme will tend to have relatively low levels of interest rate risk.
Q. How may one invest in this fund?
The scheme offers units of Rs. 10 each. Investors can invest under the scheme with a minimum investment of ₹5,000 and in multiples of Re 1, thereafter. There are both regular and direct plans available including payout options like the Growth Option and Income Distribution cum Capital Withdrawal option (IDCW).
Q. Are there similar mutual funds in the market?
This is not the first time that a fixed market plan has been introduced to the market. Prior to this, many asset management companies have launched such funds in the past. Some of them include:
| Name of the fund | Three-month returns (in %) |
| SBI Fixed Maturity Plan (FMP) - Series 34 - Direct Plan | 2.87 |
| SBI Fixed Maturity Plan (FMP) - Series 69 | 1.93 |
| Kotak FMP Series 297 - (157D) - Direct Plan | 1.83 |
| ICICI Prudential FMP - Series 88 - 226 Days Plan E | 1.82 |
| Nippon India Fixed Horizon Fund XLII - Series 4 - Direct Plan | 1.79 |
| Source: MoneyControl | |
Q. How will the scheme benchmark its performance?
The performance of the scheme is measured against the NIFTY Liquid Index. The plans under the scheme intend to have a portfolio mix of instruments, which are mainly captured by the index as applicable to the plan(s) under the scheme. Hence, they are appropriate benchmarks for the plan(s) under the scheme. The performance of the plan(s) under the scheme shall be benchmarked to the total return variant of the applicable benchmark index.
Q. Are investors allowed to redeem their mutual fund investments?
No redemption or repurchase will be permitted prior to the maturity of the scheme. There is no “Exit Load” applicable. The units under the scheme cannot be directly redeemed prior to the maturity of the scheme with the mutual funds as the units will be listed on the stock exchange.
Q. Who will manage this scheme?
Amit Modani will be managing the investments in this fund.
Q. Does the fund contain any inherent risk?
The scheme involves “Low to Moderate Risk” as per the details mentioned in the Scheme Information Document and is best suited to investors looking to benefit from the fixed returns promised in this fund. However, investors must consult their financial advisors if in doubt about whether the product is suitable for them.
