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Suresh Parthasarathy

Chennai, Oct. 16 Fixed maturity plans, which were offering high indicative yields due to rising interest rates until recently, appear to be lowering their yields now. In a recent instance, Canara Robeco Mutual Fund, which recently launched its Canara Robeco FMP –S4 (quarterly plan 3) has slashed its indicative yields on this product. The FMP had earlier quoted an indicative yield of 12.3 per cent for the institutional plan and 11.8 per cent for the retail plan. The fund house has now cut the indicative yield by a significant 1.8 per cent for both the plans, citing RBI’s CRR cuts. According to revised indicative rate the institutional plan offered 10.5 per cent and retail plan stood at 10 per cent. Will this signal a reduction in yields by FMPs that come up over the next few months? More instances may be required to turn this into a trend. But distributors cite recent reports of investors in FMPs turning more risk-averse and turning away from investments in securities from sectors such as real estate, which are perceived to be more risky and thus offer higher yields.

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