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Business News/ Money / Personal Finance/  NFO Alert: Union Mutual Fund launches Union Children’s Fund; all you need to know
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NFO Alert: Union Mutual Fund launches Union Children’s Fund; all you need to know

Union Mutual Fund announced the launch of the Union Children’s Fund. The scheme opened for public subscription on November 28, 2023, and will close on December 12, 2023.

Union Mutual Fund launches Union Children’s Fund as a part of its new fund offers. (iStock)Premium
Union Mutual Fund launches Union Children’s Fund as a part of its new fund offers. (iStock)

Union Mutual Fund announced the launch of the Union Children’s Fund, an open-ended equity scheme following a solution-oriented theme.

The scheme opened for public subscription on November 28, 2023, and will close on December 12, 2023. The scheme re-opens for continuous sale and repurchase within five days from the date of allotment.

What kind of mutual fund scheme is this?

This is an open-ended equity fund for investment for children, having a lock-in for at least five years or till the child attains the age of majority (whichever is earlier).

G. Pradeepkumar, Chief Executive Officer, Union AMC, said, “We are excited to announce the launch of Union Children’s Fund. At a time when inflation is on the rise, it has become challenging for people to invest in their children’s future needs. In this scenario, imagine a future where each child’s dreams have no limits, where his/her potential is nurtured, and where every milestone is supported with unwavering love and financial well-being. That’s exactly what Union Children’s Fund aims for – to help you plan for your child’s bright future. This investment can be a tangible expression of your love and commitment towards your child."

What is the main objective of investing in this fund?

The scheme aims to achieve long-term capital appreciation by investing in a diversified portfolio of securities, including equity, equity-related instruments, and debt instruments, in accordance with its specified asset allocation. This is intended to offer investors an investment solution. It is important to note, however, that there is no guarantee that the scheme will successfully meet its investment objective.

How may one invest in this scheme?

Investors can invest under the scheme with a minimum investment of 1000 per plan/option and in multiples of Re 1. There is no upper limit for investment.

Under normal circumstances, the asset allocation (% of net assets) of the scheme’s portfolio will be as follows:

Instruments

Indicative allocations (% of total assets)

Risk Profile

Minimum

Maximum

Equity and Equity related instruments

65%

100%

Very High

Debt and Money Market Instruments

0%

35%

Low to Medium

Units issued by REITs and InvITs

0%

10%

Very High

Are there similar mutual funds in the market?

To date, two asset management companies (AMCs) have launched such funds in the past. The following table illustrates the names of the mutual fund houses along with their respective innovation funds.

Name of the mutual fund house

Name of the fund

10-year returns (in %)

HDFC Mutual Fund

HDFC Childrens Gift Fund

16.82

UTI Mutual Fund

UTI CCF- Investment Plan

15.54

ICICI Prudential Mutual Fund

ICICI Prudential Child Care Fund

15.20

SBI Mutual Fund

SBI Magnum Childrens Benefit Fund

13.96

Tata Mutual Fund

Tata Young Citizens Fund

13.84

LIC Mutual Fund

LIC MF Childrens Fund

10.84

Source: AMFI (As of November 28, 2023)

How will the scheme benchmark its performance?

The performance of the scheme will be benchmarked with the S&P BSE 500 TRI Index. The scheme aims to invest in a portfolio of instruments whose risk-return profile is most accurately reflected by the S&P BSE 500 TRI Index (TRI). This benchmark is chosen to offer investors an impartial and representative comparison with the fund’s portfolio.

Are there any entry or exit loads to this scheme?

This scheme involves no “Entry Load", which means that investors do not have to pay anything to park their earnings in this scheme. The “Exit Load" would also be “Nil". 

Who will manage this scheme?

Hardick Bora, Sanjay Bembalkar, and Parijat Agrawal are the designated fund managers of this scheme.

Does the fund contain any inherent risk?

The scheme involves “Very High Risk" as per the details mentioned in the Scheme Information Document and is best suited to investors willing to understand that their principal will be subject to very high risk only. However, investors should consult their financial advisors if they doubt whether the product is suitable for them.

 

 

 

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Published: 28 Nov 2023, 03:32 PM IST
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