Templeton India Pension Plan-Growth

Templeton India Pension Plan is a balanced mutual fund. This fund is managed by Anand Radhakrishnan, Anil Prabhudas, Sachin Desai and Umesh Sharma. The fund has underperformed the average funds in this category. Investment up to Rs 1 lakh a year in this fund qualifies for 80 C. Yet if you skip this fund and invest in a better fund you’d end up creating a larger corpus for yourself by the time of your retirement.

Where does Templeton India Pension Plan invest your money?

Templeton India Pension Plan is a debt oriented hybrid fund which invests your money in both equity securities and debt securities. It has about 71% exposure to debt. Its equity portion is predominantly exposed to large and mid cap stocks. Templeton India Pension Plan has 26% exposure to mid size companies and 4% exposure to small size companies.

77% of the fund’s total assets are allocated to certificates of deposit, debenture and commercial paper.

Suitable for what?

  • Retirement planning
  • Saving on tax outgo

Not suitable for?
  • Long term needs
  • Creation of wealth
  • Short term needs
How much to invest?

Minimum one time investment is Rs 500 and minimum SIP is Rs 500 per month. 

Our recommendation for fresh investment
Not Recommended
Our recommendation for existing investment
How has Templeton India Pension Plan performed in the past?

If you had invested Rs 1 lakh when the fund was launched at Mar 1997, your value of investments would be around Rs 6.1 lakhs. If you had invested Rs 1 lakh five years back it would have become Rs 1.4 lakhs. The performance has not been better or similar to other debt oriented hybrid mutual funds. The fund has been giving at around 13% every year for those who stayed invested since inception.

Assume you had invested Rs 10,000 every month in Templeton India Pension Plan through SIP from the past five years today you would have around Rs 7.3 lakhs.

How will Templeton India Pension Plan perform in the future?

Debt funds are expected to give anywhere between 0.5-3% higher returns than Fixed Deposits. Debt funds that invest heavily in liquid securities are expected to returns 1.5-2.5% more than savings deposits.

What charges apply?

If units are sold before reaching age 58 an exit load of 3% is deducted from your total returns. Expense ratio of Templeton India Pension Plan is 2.27%. This is charged to recover the fund management company’s expenses on securities’ transactions, commissions, registrar fees, etc. Your mutual fund returns will be total returns less expense ratio.

What are the tax implications?

Templeton India Pension Plan qualifies for sec 80C benefits. Investment up to Rs 1 lakh made in this fund can be deducted for income tax.

Pension plan attract capital gains tax at the marginal tax slab if units are withdrawn before 1 year of investing. If held for more than a year they are more tax-efficient than bank deposits since they are taxed at the rate of 10.3% when non-indexed or 20.6% if opting for indexation.

Better alternatives

Its better to invest in an equity fund if you start planning for your retirement early.

  1. HDFC Top 200
  2. Canara Robeco Equity Diversified Fund
In case you are approaching retirement, invest in a good debt fund.

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