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Fixed maturity plans or FMPs may be running out of steam this year after raising Rs.70,412 crore in the previous one.
At least five mutual funds have called off the launch of FMPs in the last three months, according to data from mutual fund tracker Value Research. Three other schemes have extended the deadline for their new fund offers.
The product category accounted for Rs.1.01 lakh crore in average assets under management for the financial year ending in March 2013, according to data from Value Research-contributing to roughly one out of every seven rupees held by mutual funds in FY13.
A declining trend is seen if one looks at the number of schemes launched every month. The average number of FMPs launched per month has declined from nearly 73 a month in FY13, to around 54 so far this year shows Value Research data.
Fixed Maturity Plans are mutual fund schemes which invest in debt instruments with a maturity on or before the maturity of the fund itself. Their returns are in line with the returns of the debt paper it holds. Investors now seem to be looking elsewhere for returns as interest rates fall.
