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Opt for fixed maturity plan if you need discipline of a lock-in: Experts

FMPs allow investors to lock into current yields. The scheme information document indicates the fund's allocation to instruments of various credit ratings

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The investor earns a return equivalent to the YTM minus the expense ratio.

Sanjay Kumar Singh
Currently, the new fund offers (NFOs) of two fixed maturity plans (FMPs) from Aditya Birla Sun Life Mutual Fund are on. The Securities and Exchange Board of India’s (Sebi’s) website shows that fund houses like Nippon India and Kotak have also filed their FMPs, which they will launch soon.
No interest-rate risk
Currently, when there is a possibility that rising inflation and hardening yields in the West could push interest rates higher in India too, an FMP offers investors the benefit that he circumvents interest-rate risk.
“There will be a mark-to-market impact on the portfolio if rates

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First Published: Apr 16 2021 | 6:10 AM IST

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