Investing in institutional plan | Value Research Some mutual funds have retained the name institutional plan but the schemes are run like regular plans
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Investing in institutional plan

Some mutual funds have retained the name institutional plan but the schemes are run like regular plans

While looking for a short term debt fund recently, I came across Franklin Templeton Ultra short bond fund - Super Institutional plan. The super institutional plan seems to have a lower expense ratio. However, I am unable to find how this plan is different from the regular plan, and if I am eligible to invest in it as a retail investor.
- Murali

Fund houses used to offer multiple plans such as retail, wholesale, regular, institutional, super-institutional etc, catering to different classes of investors. However, Sebi has stopped this practice in September 2012 because there were allegations that fund houses were treating big investors favourably and putting smaller ones at a disadvantage. Now funds can operate only two plans in a scheme - Regular and Direct.

However, a few schemes still carry 'Institutional' in their name. Some of these schemes are suspended for sale. That means they don't accept fresh investments. However, some schemes have retained the name institutional plan but they are run like regular plans. Institutional plans which are suspended for sale and can't accept fresh investments will eventually get wiped out as only redemptions are possible on these plans. For more details refer to the link: Funds suspended for sale.

So, if you do not see the status of a scheme as 'Suspended for sales', you can go ahead and invest in it. All the plans are open to all investors now with no restrictions for a retail investor.


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