Fixed Maturity Plan

POSTED BY Rakesh Mittal ON September 25, 2010 1:43 pm COMMENTS (6)

Hi,

Is FMP(fixed Maturity plans) provide commited return and do they tell this at the time of investment?

Any further  details would be apperciable.

BR

Rakesh Mittal

6 replies on this article “Fixed Maturity Plan”

  1. sanjay singhaniya says:

    That is weird. I have bought few FMP with dividend option exactly one month ago. I thought they would deliver monthly dividend. They have not. But I can see appreciation in their NAV.

    FMP in dividend form give good post-tax returns. So I invested in them. But I haven’t received a dividend.

  2. sanjay singhaniya says:

    When do FMP declare divididends? Do we have an option to choose monthly dividend? I feel, since this is debt scheme, there should not be much problem in declaring monthly dividend.

    1. Ramesh says:

      They dont. No.
      Their structure is different than those of debt mutual funds.
      you can think of them as cumulative FD like instruments.

  3. Vikas Agarwal says:

    Rakesh

    you are too late to get the committed returns at the time of Investment 2 years back there were the time when AMCs Disclosed their FMPs Indicative Yield but after the Sep 2008 Crisis when Liquidity was Vanished from the Market Liquid fund genrates the Negative Returns…..
    After that SEBI instruct the AMCs that they should not Disclose the Portfolio as well as the Indicative Yield of FMPs

  4. Hemant B says:

    Fixed Maturity Plan (FMP) is fixed tenure, debt-based scheme, which terminate on a pre-determined date. These are ideal for investors who want to lock-in their funds at a predetermined expected rate of return.

    There is no committed return – no return can be disclosed by mutual fund company.

    http://www.tflindia.in/2010/03/fixed-deposit-vs-fixed-maturity-plan.html

  5. Rakesh

    No , they just provide indicative returns , and with all probablity mostly they acheive it . however in worst case it might happen that actual returns differ , as they also invest in other places and it is important how they mature .

    See more at : https://www.jagoinvestor.com/2008/11/real-face-of-fmps.html

    Manish

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