SBI Mutual Fund plan for children
By Our Banking Bureau | 28 Dec 2001
Mumbai: Keeping in mind the future requirements of your child, SBI Mutual Fund has introduced the Magnum Childrens Benefit Plan, an open-ended scheme that will be available for sale and repurchase throughout the year.
The scheme will endeavour to provide a long-term capital appreciation to Magnum-holders through an actively-managed portfolio of equity, debt, government securities and money market instruments.
The scheme will follow the investment principle of 80:20, whereby over 80 per cent of the funds will be invested in debt-oriented instruments and the remaining in equities a factor that gives the scheme a low-risk status. And if the bourses performance improves, the scheme may increase the equity component up to 25 per cent.
Commenting on the
scheme, SBI Mutual Fund MD Niamatullah says: "Since
SBI Mutual Fund as a brand is very strong in the mutual
fund market, we have decided to launch a dedicated plan
for the benefit of children. This would provide an opportunity
to investors to secure the future of their children through
the scheme."
The highlights of the scheme:
1. Units will be
available at par (Rs 10) during the initial offer period
and at NAV-related prices when the scheme goes open-ended.
2. The initial offer is open from 28 December 2001 till
25 January 2002, and will reopen for resale and repurchase
from 20 February 2002.
3. Parents, guardians, relatives, institutions and NRIs
can invest on behalf of a child. The child should be above
three months and below 15 years of age as on the date
of investment.
4. The minimum amount of investment is Rs 1,500 and in
multiples of Rs 100. There is no maximum limit.
5. The scheme provides a systematic investment facility under which periodic investments can be made. This facility is open only at investor service centres and after the scheme goes open-ended.
6. The scheme will provide a personal accident insurance cover to either of the parents or the Magnum-holder (only resident Indians) against accidental deaths or permanent total disability relating to these accidents up to a limit of ten times the investment or a maximum of Rs 3 lakh. In addition to this, on the unfortunate event of death of either parent, the child will stand to receive an additional 10 per cent of the claim amount towards educational expenses. The cost of providing the insurance cover would be borne by the AMC.
7. Tax benefits available to the unit-holders will be as per the prevailing laws. Thus:
i. Tax benefits are available under sections 48 and 112 on capital gains for resident Indians. The Magnum-holders will have the option to pay long-term capital gains tax @ 10 per cent (plus applicable surcharge) without the cost inflation index benefit, or @ 20 per cent (plus applicable surcharge) with the cost inflation index benefit, whichever is more beneficial.
ii. Magnums held under this scheme will not be liable to wealth tax and gift tax. Tax exemptions will strictly be governed by the relating provisions and the relevant tax laws.
SBI Mutual Fund at a glance
Background
In
1987, sensing the need for an investment alternative,
the State Bank of India launched SBI Mutual Fund, making
it the pioneer bank sponsoring mutual fund in an untapped
field with a huge potential.
Providing
a vehicle for investors
The
basic objective of any mutual fund is to provide a vehicle
for investors to avail of the benefits of investment in
the capital market and the money market. SBI Mutual Fund
aims to provide such benefits even to the smallest investor
in urban as well as rural areas, and offer an opening
to employ their funds effectively.
Establishment
SBI
Mutual Fund has grown tremendously in terms of corpus
as well as in the number of investors. Today, it is the
largest bank-sponsored mutual fund with an investor-base
of 1.1 million. SBI Mutual Fund has launched 32 schemes,
of which 12 have been redeemed, yielding handsome returns.
At present, the fund manages over Rs 3,200 crore. SBI
Mutual Fund is also the first bank-sponsored mutual fund
to launch an offshore fund, the India Magnum Fund, with
a corpus of $51 million. With the largest service network
(26 investor service centres and three investor-service
desks), SBI Mutual Fund constantly endeavours to get closer
to its growing family of investors.
Pedigree
SBI
Mutual Fund draws strength from Indias premier and largest
bank, SBI. Set up on 1 July 1955, SBI is the largest banking
operation in the country. Through years of commitment
to service and national development, SBI has grown into
an instrument of social change. Presently, it has 9,026
branches in India (excluding over 3,850 branches of banking
subsidiaries) and 52 offices in 31 countries spread over
all time zones.