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US64 Bonds up for redemption: What's next?
Personalfn.com | April 25, 2008 14:22 IST
The wait's over! US64 Tax-Free Bonds issued in 2003 are finally up for redemption. For the benefit of those who might have forgotten, US64 Bonds were issued to investors in the erstwhile Unit Scheme 64 as a part of the bailout package.
Over the tenure of US64 Bonds, the investment scenario has changed radically. Mutual funds (equity funds in particular) have come of age and found greater acceptance among investors. So it should come as no surprise, if you find yourself being persuaded from all quarters to invest the redemption proceeds of US64 Bonds in equity funds.
For example, investors in US64 Bonds have received letters urging them to invest the redemption proceeds in equity funds from UTI Mutual Fund. Mutual fund distributors are being offered higher commissions, foreign trips and other prizes as a part of a contest to urge investors to convert the US64 Bonds into funds from UTI Mutual Fund.
While the fund house and distributors are doing their bit, what should you as an investor do? Let's find out.
1. Block all the noise and conduct an honest evaluation
2. Consider your asset allocation
3. The mutual funds option
In fact the evaluation of an equity fund should begin with the fund house. First, the fund house needs to make the grade on parameters like investment processes and policies. Furthermore, it should purse a team-driven investment approach and have a track record of adhering to its investment mandate at all times.
Then, the performance of the equity fund across both the risk and return parameters needs to be evaluated. Also, the fund should have a proven track record across longer time frames and market phases.
Most importantly, the fund has to be right for you i.e. it should fit into your portfolio and must be capable of contributing towards your financial goals and objectives.
In conclusion, all you need to do is stick to the elementary (yet important) guidelines while investing and you can make the most of the US64 Bonds maturity proceeds.
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