MF funds are back with a flood of Fixed Maturity Plan (FMP) . What really are FMPs , as i understand ,they are closes ended plans ( that is ,you can only buy them when , AMC opens the subsciption , and can either hold it till maturity or may be sell it on the stock market , where it will be listed ) , which invests in rated corporate bonds and and other such instruments , which ideally have term equal to the term of the FMP .
Currently MFs are coming up with FMPs of duration of as low as 35 days, 3Months to 370 days to may be 36 Months.
With the current interest rate scenario , which has a upward bias , it is not a good idea to lock into a instrument with a longish term and FMP may just fit right for this scenario.
With too many MFs comming out with FMP issue , it would be quite a pain to track , which offer is open for subscription , I usually use http://www.mutualfundsindia.com/ to track FMP NPOs.
HDFC,DSP Blackrock and many other provide you a way to buy these online without any hassel ,but for some reason Fidelity MF had some problems after their first couple of FMP subscription online ,and since then they have taken it offline
Currently MFs are coming up with FMPs of duration of as low as 35 days, 3Months to 370 days to may be 36 Months.
With the current interest rate scenario , which has a upward bias , it is not a good idea to lock into a instrument with a longish term and FMP may just fit right for this scenario.
With too many MFs comming out with FMP issue , it would be quite a pain to track , which offer is open for subscription , I usually use http://www.mutualfundsindia.com/ to track FMP NPOs.
HDFC,DSP Blackrock and many other provide you a way to buy these online without any hassel ,but for some reason Fidelity MF had some problems after their first couple of FMP subscription online ,and since then they have taken it offline
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