• PAGE ONE
• INDEX
• HOME

Prudential ICICI plans for children

R. Y. Narayanan

COIMBATORE, July 11

PRUDENTIAL ICICI Mutual Fund is coming out with an Open Ended Prudential ICICI Child Care Plan.

A salient feature of the scheme is the offer of scholarships for meritorious students, for which a separate trust will be constituted and Accident Insurance cover for parent/legal guardian.

The Initial Offer opens on July 16 and closes on Aug 6. However, the earliest closing date will be July 26.

According to the offer document, the Child Care Plan comes with two plans - Study Plan and Gift Plan. The primary investment objective of both the plans is to seek to generate income by creating a portfolio that is invested in debt, money market instrume nts, equity and equity related securities.

However, there is a substantial difference in the planned exposure to different market segments under both plans. Under the Study Plan, in normal circumstances, 0-15 per cent of the corpus may be allocated for investment in equities and equity related se curities while the balance 85-100 per cent is allocated for debt securities, money market instruments, securitised debt and cash (including money at call).

However, the Gift Plan is a little more expansive in that equities and equity related securities get a substantially higher allocation of 51 to 60 per cent of the corpus. Debt securities, money market instruments, securitised debt and cash get the rest ( 40-49 per cent). There are caps for investment in individual sectors like Government securities or Securitised debt.

A significant feature of the Child Care Plan is the offer of scholarship for meritorious students for which Prudential ICICI Young Students Education Trust will be formed with an initial corpus of Rs 5 lakh from out of the resources of the AMC. From the second year of setting up of the trust, from out of AMC's profits an amount equivalent to 0.10 per cent of average net assets of the plan is intended to be contributed every year towards this gesture.

The scholarship is meant to defray part of the educational expenses, including studies abroad and initially, the cap on each scholarship amount will be Rs 1 lakh. The aspiring students would have to go through a selection process. The scholarship would b e awarded one year after date of allotment of units under the Child Care Plan.

The fund also intends to provide Personal Accident Insurance Cover to the resident parent/legal guardian under the scheme for which the AMC has tied up with New Indian Assurance Co. However, the insurance cover will not be available to parent/legal guard ian not residing in India.

Parent/legal guardian who has completed 70 years of age on the date of investments will be excluded from the insurance cover. The insurance cover will be available till the unit holder (beneficiary child) attains 18 years of age or exits from the scheme.

The maximum insurance cover for the present will be equivalent to 10 times the value of units (valued at the purchase price) outstanding against the name of the Unitholder subject to a maximum of Rs 3 lakh per unitholder.

The fund has said it intends to offer only a Cumulative Option under both plans of the Child Care Plan and the income earned would be ploughed back into the plan. However, it may introduce at a later date Dividend Option and Dividend Reinvestment Facilit y at its discretion.