After Kotak Mahindra, Prudential ICICI, Standard Chartered and Cholamandalam mutual funds, SBI has launched Fixed Maturity Plan (FMP) funds. Aimed at immunizing the returns of debt funds from the interest rate volatility, which the debt funds are most susceptible to, the AMC will offer a series of close-ended plans with maturity profile ranging from 60 days to 36 months and will be christened as "Magnum Debt Fund Series" (MDFS). Each of the funds will invest in AAA/AA+ rated debt instruments and government securities with residual maturity matching the maturity of the fund. The first fund in the Magnum Debt fund series is the 15 months option (MFDS-15 month) and will be open for investments from June 28, 2001 to July 7, 2001. The fund will invest in instruments that mature close to the date of maturity of the fund.
The investors can enter the fund at a minimum of Rs 10 lakh and in multiples of Rs 1 lakh thereof either in dividend or growth options. The fund will declare NAV on weekly basis and any redemption before the maturity of the specific series will attract an exit load of 3 per cent.
SBI Mutual Fund currently manages 8 debt funds, that includes two Gilt funds (short-term and long-term), two bond funds (short-term and long-term) and four monthly income plans (three closed-end and one open-end).