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Best Mutual Fund Plans for Your Children in 2022

08 June 2022

Mutual Funds are quite popular among investors because of their diversification and risk management. The best part about mutual funds is that they are not just for the rich or for people who have a lot of money to invest. Mutual Funds can be invested by anyone and you don’t need to be rich or have a high net worth to invest in them.

Mutual funds are one of the best ways to save money for your child's future. When you invest in mutual funds for kids, it earns interest which is credited to your account regularly. This interest is then used by the fund manager to buy stocks, bonds, or other financial instruments which earn returns over time. These returns are passed on to investors as dividends which they receive at regular intervals until they withdraw their investment from the fund manager at a later date.

Children's Gift Mutual Fund is a children's plan that allows you to save for your child's future. You can invest in an individual child plan, or you can choose to open a joint account with more than one child. Each child will receive their own share of the fund when they turn 18. You can start investing as soon as you have collected the required documents and established your account. You can also change your investment choices at any time after you have opened your account.

When you contribute to the Children's Gift Mutual Fund, you're not just giving your child money—you're giving them a head start on their future. With every dollar that you invest, they will have access to a diverse portfolio of investments that will help them build a solid foundation for success.

Best Children’s Mutual Fund Plans in 2022

S.No.

Fund Name

1.

ICICI Prudential Child Care

2.

HDFC Children’s Gift Fund

3.

TATA Young Citizens Fund

4.

Franklin’s Children’s Asset Plan (CAP)

5.

UTI Children's Career Plan (CCP)

6.

Axis Children’s Gift Fund


Factors to Consider Before Investing in Mutual Funds for Kids

The Children's Gift Mutual Fund was established with the goal of helping children reach their fullest potential by providing them with the tools they need to succeed as adults. It works by investing in low-risk assets like bonds and stocks while also offering opportunities for growth through other investments like real estate and commodities markets.

In addition to providing financial support throughout childhood, the Children's Gift Mutual Fund also offers benefits such as education assistance and scholarships when eligible children graduate from college or high school (or enter vocational training programs). Here are some factors that you should consider before investing in mutual funds for kids:

  • Investment Horizon: The first thing that you need to do is determine the investment horizon. The investment horizon refers to how long you will be investing in the fund. This can range from 5 years up to 15 years or even longer.
  • Documentation: The first step is to ensure that you have all the necessary documentation to invest in mutual funds. This includes proof of identity, residence and address, and proof of age. You will also need to provide your bank account number, which is usually asked for when you are investing online.
  • Returns: When choosing a mutual fund, it is important to consider the amount of return that it offers. This can be calculated by looking at past performance and other indicators such as historical volatility, tracking error, and expenses ratio.
  • Risk profile: It is important to choose a mutual fund that matches your risk profile. If you are looking for moderate returns with low volatility, then you should choose a fund with low volatility but higher returns; however, if you want high returns with high volatility then choose a fund with high volatility but lower returns.
  • Asset allocation: Asset allocation refers to how much money should be invested in different asset classes such as equity or debt funds. Equity funds offer higher returns but also higher risks so they should be invested only when there are enough resources available for an emergency situation like retirement or loss of job etc. 

Finally, once you have determined all of these things, then it's time to start looking at the different funds available so that you can find one that best fits your needs. 

Best Children’s Mutual Fund India 2022: Performance Overview

1) ICICI Prudential Child Care

ICICI Prudential Child Care Fund - Gift Plan is an Open-ended Aggressive Hybrid Hybrid scheme launched on Aug 31, 2001. It is a mutual fund that invests in stocks and bonds. It is a long-term investment plan that aims to provide capital appreciation and income.

2) HDFC Children’s Gift Fund

The HDFC Children’s Gift Fund is a mutual fund that invests in stocks and bonds. It was launched in the year 2001 with an expense ratio of 1.91%. The fund has been managed by HDFC Asset Management Company Limited since its inception.

The fund invests in stocks and bonds, which are considered to be relatively safe investments. The investment objective of the fund is to generate long-term capital appreciation by investing primarily in equity and equity-related securities, fixed income securities, money market instruments, and other debt instruments of companies located or operating outside India. 

3) TATA Young Citizens Fund

TATA Young Citizens Fund is an open-ended Flexi cap equity scheme that invests in stocks and bonds. It is managed by TATA Asset Management Company Limited. The fund was launched in the year 1995.

The fund invests in stocks and bonds of companies that are listed on the Indian stock exchanges. It also invests in government securities, corporate bonds, debentures, money market instruments, etc.

4) Axis Children’s Gift Fund

AXIS Children’s Gift Fund is a mutual fund that invests in companies that are committed to improving the lives of children. AXIS Children’s Gift Fund has been around for more than 20 years and has a long-term track record of success. It is managed by AXA Investment Managers, which is one of the largest asset managers in India. 

In the last one year, the fund has delivered a return of 7.13%, 12.75% in the last 3 years, and 10.33% in the last 5yr. It has delivered a return of 10.07% since its launch.

Conclusion

Children's Gift Mutual Fund has been set up to provide a safe and secure avenue to invest in the education and healthcare of our future generation. The fund also seeks to provide regular income by investing in debt and equity market instruments.

Investing in a mutual fund for your child's education is just the start. Investing in the best-rated Mutual Fund plans for your child can give you an even bigger return. Because at the end of the day it's not just about sending your child to a good school; it's about their future and giving them options that will help them decide their own path in life.

Disclaimer: The views expressed in this post are that of the author and not those of Groww.

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Research Analyst - Bavadharini KS

Disclaimer

The stocks mentioned in this article are not recommendations. Please conduct your own research and due diligence before investing. Investment in securities market are subject to market risks, read all the related documents carefully before investing. Please read the Risk Disclosure documents carefully before investing in Equity Shares, Derivatives, Mutual fund, and/or other instruments traded on the Stock Exchanges. As investments are subject to market risks and price fluctuation risk, there is no assurance or guarantee that the investment objectives shall be achieved. NBT do not guarantee any assured returns on any investments. Past performance of securities/instruments is not indicative of their future performance.
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