Aditya Birla Sun Life Mutual Fund asks for rollover of 6 FMPs
- Aditya Birla Sun MF cited indexation benefits of extension as well as low yields in the debt market as the reasons for the rollover
Aditya Birla Sun Life Mutual Fund has asked for rollover (extension) of six fixed maturity plans (FMPs), the fund house said in a notice today.
FMPs are close ended debt funds which open for subscription and mature on particular dates. Aditya Birla Sun Life cited indexation benefits of extension as well as low yields in the debt market as the reasons for the rollover.
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The six FMPs are Aditya Birla Sun Life Fixed Term Plan Series OZ, PA, PC, PF, PK, PI and PJ. These were launched in January-March 2018 and set to mature in April 2021. The fund house has asked for extension to different dates ranging from November 2022 to April 2023. The schemes have delivered CAGR returns of 7.3-7.8% since launch.
“Owing to low yields on offer to investors it will be prudent for existing investors to make maximum use of indexation benefit and opt for extending the investments," said the notice. “Further the massive bond rally in the previous year fueled by aggressive rate cuts and accommodative stance of the RBI has pushed rates lower. Therefore re-setting of maturity will offer an opportunity for investors of the respective schemes to get extended long term capital gain benefit for their existing investments," it added.
Investors have the option to give or withhold consent to the rollover. Those interested must give signed consent forms at designated offices of the fund house or the Registrar of Transfer Agent (CAMS) or email the fund house at abslamc.fmprollover@adityabirlacapital.com before 3 pm on the original maturity date of their scheme. Investors who fail to submit such consent forms will receive the maturity value of their investments on the maturity date.
"The investment mandate of these FMP plans is to invest in high quality portfolios. At current juncture, 1-3 yr AAA PSU bonds are trading in the range of 4.5-5.5%, offering low yield option for re-investment of maturity amount. Given, that the central bank will continue with the accommodative stance and surplus liquidity in the system, it is likely to keep the rates benign in near term. In that context, it is prudent to opt for the rollover, which not only offers additional indexation benefit, but helps counter market volatility and likely to generate reasonably stable returns," said A Balasubramanian, CEO, Aditya Birla Sun Life Asset Management Company.
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