Axis MF Launches Children Gift Mutual Fund – Exclusive for minors

Axis MF Launches Children Gilt Mutual FundAxis MF Launches Children Gift Mutual Fund


Axis Mutual Fund has launched Axis Children Gift Mutual Fund, a unique mutual fund scheme that can be invested exclusively in minors name. In this mutual fund scheme, parents or legal guardian can invest on behalf of minor children. Axis AMC got necessary approvals from SEBI about this specific mutual fund scheme. What are the features of Axis Children Gift Mutual Fund exclusively made for minors? Should you invest in such mutual fund schemes for your children education or daughter marriage plans?

Features of Axis Children Gift Mutual Fund Scheme which is for minors


 

  • This scheme NFO would open for subscription from 18th November, 2015 and closes on 2nd December, 2015.
  • Parents / Grand Parents / Legal Guardians on behalf of their minor children can invest in this mutual fund scheme.
  • Parents / Legal Guardian can gift any number of mutual fund units and there is no cap. Axis Mutual Fund got specific exemption from market regulator SEBI which allows a ‘donor’ (parent, grand parent or legal guardian) to gift any number of units to his minor account.
  • This mutual fund scheme portfolio invests in equity + equity derivatives between 40% to 60%, debt/debt derivatives between 25% to 55% and cash future arbitrage opportunities for 5% to 15%.
  • This scheme is available in regular or direct plans like any other MF scheme.
  • This scheme comes with 2 sub-plans, with lock-in and without lock period.
  • Minimum application amount is Rs 5,000.

Also Read: Which are the best Children Investment Options in India?

What are the 2 sub-plans available in Axis Children Gift Mutual Fund?


This mutual fund scheme comes with 2 sub-plans.

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1) Compulsory lock-in of 3 years and no lock-in period.

2) No lock-in period plan comes with exit load of 3% if redeemed within 1 year, 2% if redeemed within 2 years and 1% if redeemed within 3 years.

3) Compulsory lock-in is for 3 years or till minor attains 18 year of age, which ever is later. No exit load is application on this sub-plan.

How this Axis Children Gift Mutual Fund is benchmarked for comparing returns?


This mutual fund scheme returns are compared with customized benchmark. It includes 50% of NIFTY50 and 50% of CRISIL composite bond fund index. Based on this customized benchmark, future returns of this MF scheme would be compared.

Can one invest after NFO closes on 2nd December, 2015?

NFO closes on 2nd December, 2015. One can invest in such scheme through regular on going subscription too from 14th December, 2015 onwards like any other MF scheme.

Should you invest in Axis Children Gift Mutual Fund exclusive made for Minors?


This mutual fund scheme invests upto 60% in equity and balance upto 40% in debt/arbitrage opportunities. This is more or less equivalent to Balanced Fund which invests upto 65% in equity and balance in debt, however comes with unique option of investing in minors name. This is unique mutual fund scheme among the schemes available now. Since this is a NFO, we cannot say how the MF scheme would perform in future. These children mutual funds have been giving 6% to 9% annualized returns, hence performance wise, they would be lagging behind other variants of mutual fund schemes. I would personally invest in top balanced funds like HDFC Balanced fund, ICICI Balanced Fund or Tata Balanced fund compared to this goal based children mutual fund.

Readers, what are your views about this unqiue minor based children mutual fund scheme? Do you feel this would provide superior returns compared to other variants of mutual fund schemes currently available in the market?

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Suresh

Axis Children Gift Mutual Fund

Suresh KP

11 comments

  • Bimal

    As suggested, one can invest in regular Balanced fund which would probably give the same or even better return. I too looked and could not make much on how this could be beneficial to anyone. Probably for ones who cannot save and want to use some tool too force saving, this can be used. But from return perspective I too do not feel one should invest in this.

  • U.SUNDAR

    Dear sir,
    Kindly suggest me some short term funds for SIP investment
    Regards
    U.Sundar

  • Vilas Nagare

    Hi Suresh,

    Can parents redeem units after lock in periods or units has to be transferred to kids account.?

    Thanks
    Vilas Nagare

  • chirag

    nice share….

  • Arul

    All mutual funds allow investment in the minor’s name by the parent. You can include your child as first or second or third holder. What is unique in this fund?

    • Arul, Mutual funds do not allow to invest in minor name. Here you are not investing in your name here. You are investing in your minor name. SEBI has approved this for the first time

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