हिंदी में यह आलेख देखने के लिए, यहां क्लिक करें
You might be hearing a lot of Endowment plans for child education, or retirement promising you guaranteed return at certain point, like return for child higher education, marriage etc. Let us scrutinize how these guaranteed plans work.
Support a plan promise you guaranteed return of minimum 6%, but shows you charts of return of 8% and 12% based on market condition. Now, if the return is based on market condition, then how returns could be guaranteed? Here is how it works.
Support you are asked to invest Rs 1,00,000 for 10 years. Guaranteed return is minimum 6%, but you are told that return would be much higher. So, what this fund does to secure guaranteed return?
Assume that current Fixed Deposit interest is 7.5%. But since you are promised 6% guaranteed return, it means at least Rs 6,000 return should be generated per annum. Since current FD rate is 7.5%, hence out of your invested amount of Rs 1,00,000, a sum of Rs 80,000 is put into Fixed Deposit at the rate of 7.5% for 10 years. This investment generated Rs 6,000 interest per annum and it takes care of over all 6% of return that is equivalent of guaranteed return part.
Rest Rs 20,000 is put into Equity Fund. Suppose Equity provides a long term annualized return of 15% per annum, then Rs 20,000 put in equity gives you annual return of Rs 3000.
Hence, overall return would be Rs 9000 (=6000 + 3000) on investment of Rs 1,00,000. That translates to effective return of 9%. The chart below summarized this:
| Class | Amount Invested | Interest % | Interest |
| Fixed Deposit | 80000 | 7.5% | 6000 |
| Equity | 20000 | 15.0% | 3000 |
You can see that, due to guaranteed nature of investment, fund house has to keep a major portion of your investment into Debt fund to protect promised return. Even though Equity perform far better than Debt in long term, still you are not able to take much benefit of Equity exposure and your return is somewhat near Debt return only.
Summary:
So, though one invests in Guaranteed return plans expecting Equity returns, but end up getting return near Debt i.e Fixed Deposit.
Hence, instead of investing in guaranteed return plans, one must separate investment Debt and Equity and decide his/her own exposure to Equity.
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