For a moment, Just to take you off the track with this Fidelity India Children Plan, and provide you with an independent opinion about education plans business in India, I strongly recommend people to read the article Insurance v/s Investment v/s Tax savings. In that article, a good example is quoted about how different children plans & investment products go about doing business and the market for the same. Although it has no linkage to the Fidelity India Children's Plan Scheme since this is simply a fund scheme based on market returns, reading that example will give a clear insight into the children policy and investment business market and what one should be careful about before deciding to invest in children plans and other schemes.
Coming back to Fidelity India Children's Plan, Let's briefly check each of the 3 funds of Fidelity India Children's Plan:
- Education Fund - Fidelity India Children's Plan :
Trying to cater to the education cost needs of the child, this Education fund will attempt to generate long term gains. So, the money required for children education can be paid through the returns of this fund. All well said, but there is no guarantee of anything.
Whatever money you invest in this Education Fund, 65 to 100% of it will be in equity investments, as this is for long term. But then, no guarantee of any returns. Rest of the money 0-35% will be in debt and money market instruments.
- Marriage Fund - Fidelity India Children's Plan :
Another long term investment horizon fund. Similar Asset allocation like Education fund, but additionally this fund will also invest 0-25% in Gold based ETF's. (See list of Gold Based ETF's available in India)
Again, no guarantee of anything - your returns are dependent on the market risks and the performance of the underlying invested assets
- Savings Fund - Fidelity India Children's Plan :
Everything in Savings fund is invested in debt and money market instruments, so that there is some savings amount available. Since it is dent based investment, dont expect high returns from this funds, as can be from other equity based funds.
Overall, this will be a pure mutual fund scheme, with units being offered at Rs. 10 during NFO period and then the end of the day NAV value will be calculated post the NFO period. Typical Fund of Funds scheme.
So now, you like this product from Fidelity and want to invest in it? Hold on again, let's check the charges you need to pay to invest your money in this scheme and also the charges you will pay if you want to exit from this scheme or redeem your invested money. Last Part: Charges for Fidelity India Children's Plan: Exit Load, Entry Load
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