SBI Mutual Fund has launched a children fund: Magnum Children Benefit Plan. The scheme is open for initial offer from December 28, 2001 to January 25, 2002. It will reopen for continuous sale/purchase from February 20, 2002. The fund will invest upto 20 percent of the corpus in equities and the rest in debt and money market instruments.
Parents/Guardians/Relatives/Institutions and NRIs can invest on behalf of the child. The child should be above 3 months and below 15 years of age, as on the date of investment. The scheme will provide a personal insurance cover to either of the parents or the fund holder (Indian Residents only) against accidental death or permanent total disability upto a limit of ten times the investment or a maximum Rs 3 lakh. In such a case, the child will also receive an additional 10 per cent of the claim amount towards educational expenses.
Minimum investment is of Rs 1,500 and in multiples of Rs 500 thereafter. Entry into the fund is on a no-load basis during initial offer period. However, the fund will charge an entry load of 1.25 per cent when it reopens for sale/purchase at NAV price. An exit load not exceeding 3 per cent will be charged, if redeemed before 3 years. On reaching 18 years of age, the fund holder will have an option to withdraw their holdings either as a lumpsum amount or over a period of five years on annual/semi-annual basis.
The fund will disclose its portfolio every quarter.