Why should you invest in Peerless 3-in-1 Child Plan Mutual Fund?
Peerless Child Plan 3-in-1 Child Plan Mutual Fund has been re-launched in May 2015 and there are its news doing the rounds. The plan was originally launched for the first time in April 2011. In their official statement, the Peerless Fund Management Company Limited (PFMCL) claimed that this plan would provide gold as the main asset. After its re-launch, a lot of questions have been starting coming out like the worth of investing in this plan, will this plan pay in long run, etc.
What is Peerless 3 in 1 Child Plan Mutual Fund?
If you are looking for an opened ended hybrid or balanced mutual fund, then Peerless 3 in 1 Child Plan may suit your needs. It invests in Gold ETF, debts and equity. The scheme has been remade quite risk proof and best suited for investors who are risk averse. Anyone who has a child of less than 18 years or age can invest in this scheme under the child’s name.
Why has the scheme been re-launched now?
The earlier scheme limited the investor why only making those eligible for the scheme who have a minor child below the age of 18 years. After the re-launch, anyone can invest in this Child Plan. This scheme would also put Peerless in the line of mutual funds who are putting gold as the risk management tool in order to administer the portfolio.
The Portfolio of Peerless 3 in 1 Child Plan Mutual Fund Scheme
The Peerless 3 in 1 Mutual fund consists of a portfolio like this:
- 50 per cent in fixed income
- 20 per cent in equity, and
- 30 per cent in gold
Due to the low equity proportion, this scheme would turn out to be less risky and those looking for secure investment would simply go for it.
Why should you invest in Peerless 3 in 1 Child Plan Mutual Fund?
As we have discussed earlier, the scheme invests in debt, equity and gold options in a fair ration. The scheme has been fetching 8 per cent of annualized returns in the last three years, which you can also get while investing in debt funds. If someone invested Rs 1,000 per month in this fund for the last three years, he would have invested Rs 36,000. At the same time the fund’s value would turn out to be Rs 41,000.
On the other hand, if someone had invested the same amount in ICICI Balanced Fund, the fund value would have become Rs 54,000. In HDFC Balanced Fund, the same investment would have become Rs 55,000.
This way, we can see that the returns are not really comparable to other competitive mutual funds. Even if the scheme objectives are fair and noble, the return value is quite less and thus a lot of advisors would not give this scheme a fair ranking.