Fidelity India Children's Plan: Review, Analysis & Details of Fidelity Children Plan Funds

All parents in this world care for their children - and that means providing them with all kinds of support - financial support being the most important one. It requires paying for all kinds of expenses for the children, right from the birth till the child becomes capable enough to live on his own.
In countries like India, parental care continues till long - even after a person has settled in his job, got married and so on. Hence, Indian investment market is flooded with so called Children Plans or Children Investment Plans, which claim to take the worries off the parents provided an investment is made in such plans by the parents.

Fidelity India Children's Plan Review & Investment Calculations

Fidelity, which is a reputed name in Investment business, has come out with its own version of Children Plan called the Fidelity India Children's Plan. In this article, we review the Fidelity India Children's Plan investment scheme and try to explian whether this investment is any good option for investment

The 3 main expenses for a child in India are his education, his marriage, and some savings which can be given to him to settle down or start up service/business so that he can start earning. Fidelity has focussed on these 3 expenses for a child and that is the underlying funda behind this offering.
This investment product from Fidelity called the Fidelity India Children's Plan is actually a mix of 3 funds - you can call it Fund of Funds (What's this? Fund of Funds Explained). The three underlying funds in this children investment plans are:

- Education Fund

- Marriage Fund

- Savings Fund

So in essence, when you invest your money in Fidelity India Children's Plan, that money will get invested in different proportions in above 3 funds which will be managed by Fidelity Fund Managers. From the one pager document which is available on Fidelity's site (PDF), it appears that an investor is allowed to make investments into his choice of funds, as he is allowed to switch money from one fund to the other.
Before checking the calcuations, let's see some basic details of this Fidelity India Children's Plan and it's udnerlying funds:

Things which are common to all the funds:
Minimum Investment Amount is Rs. 5,000 PER FUND. i.e. anyone willing to invest in all the 3 funds will have to invest atleast 15,000 Rs.
Above that, investments are accepted only in multiples of Rs. 500 in each fund. Now this is something which I dont like. First there is a minimum investment amount at 5K, and if anyone wants to invest more than that, there is a multiple to be followed at 500. It creates a problem for investors if they are tight on budget or are going by some allocation on their own (say anyone willing to invest a total of 20K in equal proportions in all 3 funds, he cant invest 20K/3 = 6,666.67 since it is not a multiple of 500). Investors either have to do away with their calculations or invest different amounts. In my opinion, anything in multiple of Re. 1 should be allowed over and above the minimum investment limit.

One more thing which investors must clearly note is the Minimum redemption amount/units: Rs. 1,000 or 100 Units in respect of each Fund
This again will cause a problem if an investor wants to redeem systematically. Another restriction!

Like any typical mutual fund option, you have the Growth and Dividend Options.

SIP, SWP and STP are available in all the 3 plans.

There are no charges for switching between your invested capital these 3 funds. However, it is not clear whether the switching amount has to be a multiple of Rs. 500 or not.
So overall, if you think you can meet these "restrictions" of investment set by Fidelity India Children's Plan, you can consider this for investment.

But hold on, let's see where your invested money is going, what are the charges and what can you expect in return? Continue to Next part