There are number of mutual fund schemes,insurance plans available targeting the natural love and affection relation of parent and children.HDFC mutual fund offers a low cost long term capital creation plan for children Viz.HDFC Children’s Gift Fund.
This scheme offers investors 2 plans:
1.Investment plan (Equity oriented).
2.Saving plan(Debt oriented).
Here we are mainly focused on investment i.e,equity oriented plan.
Scheme Objective:
HDFC Childrens Gift fund Investment plan is a open ended balanced fund with an objective of long term capital appreciation by investing predominantly in equity markets.Investment strategy is as below:
| Instruments | Min. allocation | Max allocation | Risk |
| Equity | 40% | 75% | High |
| Debt | 25% | 60% | Low |
Scheme Launch date: Feb. 2001.
Eligibility : Children less than 18 year of the age.
Applicant have option to lock in the units till attaining the majority i.e. till completion of 18 years.
As parents/guardian are paying on behalf of child,submission of third party declaration is compulsory.
Scheme Top Sectoral Exposure:
1.Financial:12.64%
2.Healthcare:12.44%
3.FMCG:9%
4.Automobile:6.30%
5.Consumer Durables:6.10%
Scheme Performance Vs Benchmark Returns:
1.Last 1 Year: 21.01% 6.16%
2.Last 3 Years: 22.72% 13.89%
3.Last 5 Years: 15.56% 12.42%
4.Since inception: 18.56%
Returns are compounded annually for lumpsum investment.
Expense ratio: 2.25%.This scheme expenses are inclusive in above returns indicated.
SIP Facility: Available from Rs.500/- per month.or Min Rs.5000/- in lumpsum.
Accidental Death Insurance:
Parent whose name is appeared in application form as a guardian / parent is insured under Group insurance cover by The New India Assurance Company Ltd.The Capital Sum Insured(CSI) under the personal accidental insurance cover will be equivalant to 10 times of the cost of outstanding units maximum upto Rs. 10 lac.Main Benefits of the cover are as follows:
Death due to accident: 100% of CSI
For permanent total disability: 100% of CSI
Loss of 2 eyes or 2 limbs OR 1 eye and 1 limb in an accident:100% of CSI
Loss of 1 eye or 1 limb in an accident: 50% of CSI
Cost of the insurance cover will be borne by AMC.
There are number of childrens plans available in the market.This balanced fund may be the good option for long term appreciation and investors may consider this option to fulfill the goal of their children’s education.
