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Another Child Fund on block

Emotional bond is the sales pitch this year! Thus, yet another children fund (this time from LIC Mutual Fund) has hit the market and promises to create a substantial investment pool for a bright and secure future of your child. LIC Mutual Fund's "LIC Children Fund" opened for subscription on September 26, 2001.

Already, investors have been bombarded with six open-ended child specific funds offering plans in balanced and debt flavors. Thus, essentially a old wine in new bottle, what separates this new breed of funds from a plain vanilla debt or balanced fund is a lock-in period linked to the child's age. However, LIC Children Fund does not have any lock-in period but levies an exit load of 1.5 per cent if the investment is redeemed before the child attains maturity. With equities being in red throughout 2001, the new fund has rather chosen a surprisingly conservative stance – of investing only in debt instruments to reach a long-term capital appreciation goal.

Scheme Features
  Issue open   " September 26, 2001"
  Issue closes  ": October 16, 2001 "
  Minimum Investment :  : Rs 5000 and in multiples of Rs 0/-
  Entry load  : 1%
  Exit Load :  
  Within 3 yrs  : 3%
  After 3yrs<18yrs  : 1.50%

    Right Choice?
If you are keen on making child-oriented investments, you can create your own customized child fund by picking up any balanced, equity or debt fund with a proven track record. With regular or lumpsum investments, you can avoid being trapped in the lock-in period. Although a high lock-in period enforces disciplined investing at the same time, if the fund is giving nasty surprises, you cannot make an exit. Therefore, investors can well ignore this offer and rather invest keeping in mind the personal investment goals and immediate needs of your child.

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