SBI's Capital Protection Fund – Should you invest?

Markets have been going through wild swings due to global uncertainties. Scared of investing in stock markets or mutual funds in volatile markets! Start with investing in Capital Protection Oriented fund. SBI Mutual Fund is coming up with Capital Protection Oriented Fund – Series III to attract the risk averse investors.

SBI Capital Protection Oriented Fund Series III is a three-year close-ended scheme, aimed at protecting capital on maturity through investments in equity, debt and money market instruments.

The fund is especially designed for risk-averse investors who don't invest in equities because of high risk associated with their nature. Though the category has yielded average performance, but the fund ensures principal protection.

The returns of Capital Protection Oriented Fund are not that attractive because of their low risk nature as these funds invest in safest instruments like government securities or AAA rated corporate bonds which offer low returns. Most funds in this category have returned 4-5% return over three years. SBI Capital Protection Oriented Fund Series I has given about 5.37% returns over three years while the category has returned 7.03%.

This scheme has been rated AAA by Fitch.

Basic Details:
NFO Opens: September 15, 2011
NFO Closes: September 29, 2011
NFO Price: Rs.10 per unit
Options: Growth option
Minimum Application Amount: Rs 5,000 per application and additional of Rs 10, thereafter
Exit Load: Nil
Benchmark: CRISIL MIP Blended Index
Listing: Bombay Stock Exchange
Fund Manager: Mr. Rajeev Radhakrishnan and Mr. Rama Iyer Srinivasan

View: If you are risk-averse investor, you can trust this fund as it has been rated AAA by Fitch, though returns wouldn't be that attractive but fund ensures principal protection.

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