Aditya Birla, HDFC Mutual Fund to merge FMPs into debt funds

Aditya Birla Sun Life Mutual Fund and HDFC Mutual Fund will merge their Fixed Maturity Plans (FMPs) – fixed tenure debt products – coming up for maturity in April and May into their existing open-ended fixed income schemes.

The move will be more tax-efficient for investors who do not need the investment proceeds immediately, said investment advisors.

Aditya Birla Sun Life Mutual Fund said it will merge 17 FMPs with total assets under management of 4,000 crore maturing between April 15 and May 23 into Aditya Birla Sun Life Low Duration Fund and Aditya Birla Sun Life Nifty SDL April 2027.

HDFC Mutual Fund plans to merge five FMPs with AUM of about 1,100 crore into HDFC Corporate Bond fund.

“In a rising interest rate scenario, investors looking for an alternative to reinvest their FMP proceeds get a ready solution, with liquidity and efficient taxation,” said A Balasubramanian, CEO, Aditya Birla Sun Life Mutual Fund.